Summary: EU Presidency Statement - Macroeconomic Policy Questions and Financing for Development (12 October 2005: New York)
EU Presidency Statement by the United Kingdom Mission to the United Nations, on behalf of the European Union on Second Committee agenda items 50: Macroeconomic policy questions, and 51: Follow-up to and implementation of the International Conference on Financing for Development, 60th Session of the United Nations General Assembly, New York
Mr Chairman
I have the honour to speak on behalf of the European Union. I speak on behalf The Acceding Countries Bulgaria and Romania, the Candidate Countries Turkey and Croatia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Serbia and Montenegro, as well as Ukraine, align themselves with this declaration.
As well as intervening on Financing for Development, the EU will address the macroeconomic agenda items debt and international financial system in this debate. We will make brief remarks on Trade - given its essential role in FFD - and will return to Trade issues in more detail in the debate on 31 October
The EU strongly supports the partnership between developed and developing countries set out in the Monterrey Consensus, which states that while "Each country has primary responsibility for its own economic and social development … National development efforts need to be supported by an enabling international economic environment". The EU remains strongly committed to supporting country-led sustainable development through actions on aid volume, aid effectiveness, debt relief, innovative
financing mechanisms, trade and the international architecture and attaches great importance to carrying out the reforms of aid delivery and management that are embedded in the Paris Declaration on Aid Effectiveness. These messages were clearly reaffirmed at the World Summit in September.
On the mobilization of domestic resources, the EU believes that domestic and external resources can only be mobilized - and that external assistance can only be effective - in an appropriate domestic environment. We recommitted to this view at he Summit. Good governance, a transparent and accountable public financial management system, equitable and efficient tax systems, the fight against corruption, full integration of the MDGs into country-owned plans and PRSPs, and a stable and
predictable investment climate are all vital for mobilization and effective use of both domestic and external resources. And important step forward in this regard is the imminent entry into force of the UN Convention on Corruption. The EU encourages all member states who have not yet done so to sign and ratify the Convention.
The EU is committed to support developing country efforts to create the necessary enabling environment, including by assisting developing countries in integrating the MDGs into their national strategies by 2006. The EU believes that mobilization and allocation of resources will increasingly take place in line with partner countries' own priorities with regard to poverty reduction, hunger, health, education, gender equality, water, sanitation and environmental sustainability.
On trade, the EU believes that, through the Doha Round, the international community must deliver real gains. With a comprehensive, pro-development agenda, combining trade liberalisation with rule-making and complementary aid for trade and trade related capacity building, the Doha Round can bring benefits to all trading partners and in particular developing countries. We should all make efforts for the successful conclusion of the WTO Doha Round. The Hong Kong WTO Ministerial Meeting
later this year is an opportunity not to be missed. The EU intends to come back to this issue in the debate on International Trade and Development later this month, but hope that in the future, trade can be addressed jointly with other macro-economic issues in the 2nd Committee.
On aid volume, the EU recognises that increased ODA is urgently needed to achieve the MDGs. At present, four out of the five countries which exceed the UN target for ODA of 0.7% of GNI, are member states of the European Union. We recall the 16-17 June European Council endorsement of a new collective target of 0.56% by 2010, and the undertaking to achieve an ODA/GNI target of 0.7% by 2015. The member states who joined the EU after 2002 will strive to increase their ODA/GNI share to 0.33%
by 2015. The commitments made by Member States should see annual EU aid double to over $80 billion in 2010 compared to 2004 levels. We welcome the Summit's recognition of timetables such as that established by the EU and urge other donors to join us. The EU will increase its financial assistance to Sub-Saharan Africa and will provide collectively at least 50% of the agreed increase in ODA resources to the continent, while fully respecting individual Member States' priorities in development
assistance. All measures taken as regards policy coherence and quality of aid will be applicable to Sub-Saharan Africa as a priority.
We also reaffirm the need to improve the quality and effectiveness of aid. The EU is fully committed to a timely implementation and monitoring of the Paris Declaration on Aid Effectiveness, including monitorable targets for 2010 and of the EU specific commitments adopted at the Paris Forum. In order to better respond to the need for stable resources and in view of the expected increases in ODA flows, the EU will develop new, more predictable and less volatile aid mechanisms. Such
mechanisms could consist of the provision of a minimum level of budgetary aid where circumstances permit, secured in a medium term perspective and links to policy performance in the partner countries, in particular in relation to the commitment towards achieving the MDGs in national plans and poverty reduction strategies. The EU welcomes the clear support that leaders gave at the World Summit to the Paris Declaration on Aid Effectiveness. The UN system also has an important role to play in
contributing to aid effectiveness through its commitments to the Paris Declaration, as guided by UNDGO; and through implementing the summit commitments to more effective, efficient, coherent, and coordinated country level operations.
EU Member States are united in their commitments to increasing aid and follow several routes to that aim. Some Member States firmly believe that innovative financing mechanisms can help deliver and bring forward the financing necessary to achieve the MDGs and may increase and supplement traditional sources of finance. A group of Member States will implement the International Finance Facility (IFF) as a mechanism to frontload resources for development. A group of countries have launched
the IFF for immunisation and made firm financial commitments. A group of EU Member States will implement a contribution on airline tickets to enable financing development projects, in particular in the health sector, directly or through financing the IFF. Some other EU Member States are considering whether and to what extent they will participate in these initiatives or otherwise continue to enhance traditional ODA. The Summit recognised the value of developing innovative sources of finance and
took note with interest of initiatives in this regard.
The EU believes that migrant remittances can be an important source of financing for development, complementing domestic savings in developing countries. We therefore welcome efforts by Governments and stakeholders to adopt policies and undertake measures to reduce the cost of the transfer of remittances, in line with the Monterrey consensus. The EU emphasises that such private transfers must complement, not replace, other sources of financing for development such as official development
assistance and debt relief.
We welcome and support the G8 initiative to cancel 100% of outstanding debt of eligible Heavily Indebted Poor Countries to the IMF, IDA, and African Development Fund and, on a fair burden-sharing basis, to provide additional resources to ensure that the initiative is fully financed without reducing the IFIs' financing capacity. We must ensure that the problem of unsustainable debt will not re-occur. We look forward to the implementation of the initiative in line with the agreement at the
Annual Meetings of the BWIs.
The EU underlines the importance of building inclusive financial sectors, and the important contribution that access to financial services can make to poverty eradication. In this regard we welcome the activities undertaken in the framework of the international Year of Microcredit.
On the international architecture, the EU remains committed to ensuring the effective participation of developing countries and countries with economies in transition, and to this end, will continue to advocate enhancing the voice of these countries in the International Financial Institutions (IFIs). We note the recognition of the Development Committee of the IMF and World Bank that enhancing the voice of developing and transition countries in those institutions is of vital
importance.
Staying Engaged
Mr Chairman,
The UN and Monterrey stakeholders have addressed Financing for Development issues in a series of meetings this year: the ECOSOC/BWI/WTO/UNCTAD Spring Meeting; the High Level Dialogue on Financing for Development in June; and the FFD meeting on 14 September at the opening of the Summit. Other events such as the Spring and Annual Meetings of the Bretton Woods Institutions; the European Council in June; and the G8, South-South and African Union Summits have also taken important decisions with
respect to FFD. And of course FFD issues formed a key part of the Summit outcome document adopted by the General Assembly on 16 September. This in itself constitutes a substantive review of the state of implementation of the Monterrey Consensus.
The EU believes that the balance of these debates, meetings and agreements is clearly positive. This year we have demonstrated that the Monterrey Consensus is alive and well. Implementation is underway in both developed and developing countries - although all of us could do more. As we have said, the WTO negotiations will be an essential part of the progress that needs to be made this year.
Mr Chairman
Implementation of the Monterrey Consensus will always need to be taken forward at the national and international levels; in the UN and in other international fora, involving all relevant stakeholders. It is constantly under review - as it will be again in this Second Committee.
The EU looks forward to discussion in this 2nd Committee of modalities for further review of Monterrey, in line with para 73 of the Consensus. In this regard we take note of the generous offer from the Emir of Qatar to host a follow up conference in Doha. We will study the offer with interest, and look forward to hearing further views from partners.
Before we decide on the timing and location of further Monterrey review, we should focus on what kind of review we want. In line with resolution 57/270B, we should reflect carefully on the extent to which we can meet our objective of reviewing implementation of Monterrey within existing mechanisms. We already have the High Level Dialogue of the GA, which has proved effective at mobilising international attention. For example, this year's HLD was the opportunity for the EU to present its new ODA
timetables to the wider UN membership. The next High Level Dialogue is due to take place in 2007.
We should also consider the best timing for the next round of Monterrey review. In that regard, we need to make an assessment of the Summit Outcome Document and its implementation; other key events and decisions taking place this year; and the rest of the UN's forward agenda. We should not automatically resort to the "plus 5" formula.
We look forward to further discussion with partners in the weeks ahead.
* Croatia continues to be part of the Stabilisation and Association Process
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