Speech at the European Union and the South:
A New Era, The international responsibilities of an
enlarged European Union, Vienna
November 4, 2003
By George Vassiliou
Dear friends,
We are all very happy. In a few months our countries, the
ten new members of the European Union will take up our
positions. We have certainly come a long way since 1990.
At long last Europe is really united, for the first time
in its very long history. In this new united Europe we all
feel safe and secure. We can now build our common future
with certainty. We know that ahead of us lies a long road
but at the same time a fruitful one.
We can now plan and build not only in our capitals, not
only in every district and every corner of our country,
not only in one country but in the whole of Europe. And we
can seriously address all issues related with development
in our region but also in the whole world. We also
recognise and realise that in today’s globalised world it
is impossible to hide in one country. The whole world is
inter-related and events even very far away affect every
single country. What is happening in Afghanistan, in Iraq,
in Africa, in Latin America does not anymore interest only
the people of those countries or areas but all of us.
Development assistance is not a new phenomenon. It has
been with us for a long time but as it is easy to
understand it has taken different forms. In the past it
was greatly related with the national traditions and
particularly with the colonial history of many of the EU
countries. Even in the European Union most of development
assistance in the first decades was mainly a national
rather than a Union activity and was closely related to
the export of services and goods or the maintenance of
political influence. In the Soviet Block it was also
related to the export of goods and to a great extent to
the export of ideas through education. The Scandinavian
countries were probably the only ones which had a history
of development assistance based on purely humanistic
principles. Gradually, however, the situation was changing
with the European Union playing a role of its own,
particularly after the Rio Conference in 1992 and the
Maastricht Treaty. The EU member countries realised the
need for closer cooperation between them as well as that
development assistance provided collectively through the
EU was going a longer way and was more effective than
individual efforts.
With this excellent speech of Mr. Richelle, yesterday,
gave us a very good outline of the EU development policies
pointing out the objective of reducing by half the extreme
poverty in the world by 2015. The aim is to devote 0.39%
of gross national income for development. In many
countries, however, people already speak of the need to
devote 3%; 1% through the state budget and 2% through
private sources. There is no doubt that much greater
attention is given to whole idea of help and support for
the poorer countries of this world than before.
If one wants to be bland, we have to recognise that this
greater attention for development issues and the need to
help poor people in their own countries is greatly related
to the fact that we got scared. We realised that we cannot
possibly isolate our countries and that desperate people
from the poor nations of this world are turning to illegal
immigration which is growing by the hour, I would say,
rather than by the month. Thousands of women become
victims of international prostitution networks while the
illegal cultivation of narcotics is getting bigger and
bigger. Coupled to these developments is the fact that
particularly in Europe the population growth has been
declining and social security is in crisis. There is a
need both to promote legal immigration and at the same
time to help the poor and under-developed countries of
this world to stand on their own feet.
To be efficient, to be effective we need to act and we
need to act together. There is no doubt that if we put our
experiences and capabilities together and work through
Brussels we can achieve a lot. This, however, is not
enough. Developing cooperation is both needed and
important but it is not the whole story. Our policies to
be effective and to bring real results must be coherent.
Today the ugly truth is that this coherence does not exist
and in many ways and many cases we take with the one hand
much more than what we give with the other. This is
particularly true for the relationship between the common
agricultural policy and the development policy where we
witness the most blatant and crying lack of coherence.
To start with let me simply point out that out of an
approximately 100 billion Euros annual budget, 46 are
spent on the CAP, 33 on structural projects and only 4.8
bn on external policies which, between others, includes
development assistance as well. There is therefore a
relationship of 10 to 1 in favour of CAP in terms of money
spend. What is even worse, however, is the fact that in
many cases the money spent on supporting a few farmers
within the Union ends up in destroying tens of thousands
of producers around the world. The most blatant example is
that of sugar. While sugar costs three times as much
within the Union than in the world still the EU exports
56% of the sugar in this world and is responsible for
destroying thousands and thousands of effective and small
farmers in Latin America or Africa. Characteristically
there are estimates which state that Mozambique alone has
lost in one year because of the sugar policy of the EU 108
million Euros while the total aid received under all kinds
of headings from the EU was only 150 million.
The liberalisation of trade which we have all supported
and support as we hope that it would bring benefits to the
whole world, because of the CAP ends up in destroying
thousands of producers in developing countries. A typical
example of that is milk. With the freeing of trade of milk
Jamaica a traditional and efficient producer of milk found
itself in an impasse. Huge quantities of subsidised milk
and milk powder were imported in Jamaica and Brazil
putting out of the market local producers. A similar story
was that of tomato concentrate. Senegal used to have a
production of 73,000 tons of tomato concentrate, as a
result of the liberalisation of trade it now has only
20,000 and most local tomato producers have gone out of
production.
Unfortunately, this policy of subsidies and artificial
support for EU farmers and related industries is mainly
the work of efficient lobbies like the sugar or the meat
processing lobby. As a result development and growth in
most countries of Africa and other parts of the world
becomes practically impossible. Even the program which is
supposed to have been designed in order to help the poorer
countries of this world, the ‘everything than arms
program’ which theoretically would have permitted the
import of various products from the least developed
countries of the world has a lot of exceptions. We heard
yesterday, for example, that these countries can only
export raw meat and if they dare to build a small canning
factory to process and export canned meat then they end up
in having to pay prohibitive duties. In the same way it is
permitted to export unprocessed coffee and cocoa but there
are high tariffs if they are processed. It has been
estimated that the total cost of subsidies paid by the
OECD countries is equal to about $350 billion per annum
compared to only a few tens of billions provided as
development aid by the same countries. To avoid any
misunderstandings we should point out that we fully
support the need to help poor and medium size farmers.
However, there are many ways by which these objectives can
be achieved without, at the same time, hurting the
interests of millions of people in the developing
world.
Finally in this field I should also mention that other
than the tariff and quota barriers there are other hidden
barriers as well which are related to product
specifications the so-called non-tariff barriers. A
typical example of that is the regulation that specifies
the exact size of bananas that are imported in the
European Union. As a result Ghana failed in the export
efforts because its locally produced bananas were slightly
shorter than the specified size. (As a Cypriot I should
point out that I am quite happy for these specifications
because our bananas, which are much smaller, are so sweet
that selfishly I prefer that we consume them rather than
export them.)
The few examples that I have given you make it abundantly
clear that there is an urgent need to review the CAP,
which as it is today benefits few and hurts many. A few of
the reasons in favour of this policy are:
Ӣ asymmetry in support within the Union as today a few
countries benefit but many others end up paying the
price
Ӣ the fact that, as a rule, only large farmers benefit
and the great majority of small and medium producers get
no special benefits
Ӣ consumers pay approximately 44% more for their food
than they would have had to pay otherwise and in addition
this policy ends up in harming the environment as well
Furthermore, we should not forget that this policy will
not really benefit the farmers of the new countries as
most are small and not able to effectively compete with
their colleagues in the present member states.
Finally, as it has already been recommended, there is need
for the services of an ombudsman that monitors the effects
of the CAP and other EU policies, and ensures that there
is no conflict with the efforts to help the developing
world. The case for helping the developing world is clear
as this is the only way to secure the steady growth of the
world's trade and economy while at the same time
protecting the environment. There is absolute need for
more cooperation between the member countries but there is
even greater need for coherence in the policies that are
adopted and implemented. This is the first step.
Subsequently we will have to move towards greater
cooperation with the whole world in order to ensure
respect for nature and for the other nations. Only if we
respect and protect each other we can all survive and
prosper.