Identifier
Created
Classification
Origin
09BRUSSELS1028
2009-07-28 09:57:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
USEU Brussels
Cable title:  

EEB/ODF Director Nutter's Development Meetings with EU

Tags:  EAID ECON SOCI EIND ETRD SENV TPHY TSPL EUN 
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DE RUEHBS #1028/01 2090957
ZNR UUUUU ZZH
R 280957Z JUL 09 ZDK ZUI RUEHLJ 3234 2091158 SVC
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHSS/OECD POSTS COLLECTIVE
UNCLAS SECTION 01 OF 03 BRUSSELS 001028 

SENSITIVE

STATE FOR EUR/ERA KESSLER, WILLIAMS
STATE FOR EEB/IFD/ODF NUTTER, LAITINEN
STATE FOR EEB/TPP/ABT/ATP CLEMENTS
STATE FOR NSC GAYLE MURPHY
USDA for FAS/OSTA Froggett
USDA for FAS/OCRA Nenon


State Pass to USAID FOR NNICHOLSON, NOMEARA

SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON SOCI EIND ETRD SENV TPHY TSPL EUN
SUBJECT: EEB/ODF Director Nutter's Development Meetings with EU

BRUSSELS 00001028 001.2 OF 003


UNCLAS SECTION 01 OF 03 BRUSSELS 001028

SENSITIVE

STATE FOR EUR/ERA KESSLER, WILLIAMS
STATE FOR EEB/IFD/ODF NUTTER, LAITINEN
STATE FOR EEB/TPP/ABT/ATP CLEMENTS
STATE FOR NSC GAYLE MURPHY
USDA for FAS/OSTA Froggett
USDA for FAS/OCRA Nenon


State Pass to USAID FOR NNICHOLSON, NOMEARA

SIPDIS

E.O. 12958: N/A
TAGS: EAID ECON SOCI EIND ETRD SENV TPHY TSPL EUN
SUBJECT: EEB/ODF Director Nutter's Development Meetings with EU

BRUSSELS 00001028 001.2 OF 003



1. (SBU) SUMMARY: On July 7-8, the Director of the Office of
Development Finance (ODF) within State's Economic, Energy, and
Business Bureau (EEB) held consultations with European Commission
and European Union (EU) member states' development officials to
discuss U.S.-EU development issues, including a possible U.S.-EU
development dialogue. Commission and member state interlocutors
expressed enthusiasm for a dialogue, with food security, development
and aid effectiveness, climate change, and emerging donors favored
by the EU for dialogue topics. END SUMMARY.

BACKGROUND
--------------


2. (SBU) The Director of State's Office of Development Finance
(ODF),Julie Nutter, concluded two days of talks with Commission,
Member State and EU Presidency officials July 8. USEU Development
Counselor Jonathan Addleton also participated in some of the
discussions, which focused on food security, aid effectiveness,
emerging donors, opportunities for further U.S.-EU collaboration and
cooperation, and establishment of a possible development dialogue
between the United States and the EU. Finnish Ambassador to the EU
Jan Store hosted a lunch for Nutter, attended by U.S., Swedish and
Spanish development counselors and centered on development issues as
prioritized by the current and prospective EU Presidencies and by
Finland, which strongly favors a dialogue. Nutter and her
interlocutors agreed to continue discussions on the dialogue and
related issues at various fora in the run-up to the annual U.S.-EU
Summit, currently foreseen for early November, as development is
expected to be on the agenda.

MANY DEVELOPMENT THEMES TO DISCUSS

--------------


3. (SBU) Throughout her discussions, Nutter emphasized the plethora
of policy issues that provide opportunities for cooperation and
could support a policy dialogue, including the role of emerging
donors, the use of the Millennium Deelopment Goals (MDGs),
public-private partnerhips, innovative financing, and the role of
diasporas in development. She stressed the importance of discussing
obstacles to collaboration with a view toward "cooperating as far as
we can." She noted President Obama and Secretary Clinton are making
Africa a priority, especially in regard to food security. Nutter
added that EU President Barroso's chief of staff Joao Vale de
Almeida, in a conversation early July with State Deputy Secretary
Lew, emphasized the Commission's "continued focus on food security."
She underlined that, given the context of the financial crisis and
pressures on assistance budgets, the world's two largest donors
could not afford to be duplicative and inefficient. Nutter also
repeatedly pointed to the role of the Millennium Challenge
Corporation (MCC) as an important model for highlighting the role of
development partners in determining development priorities and in
creating the policy environments necessary for development programs
to work. Addleton urged continued consultation with the field and
emphasized its importance in informing any dialogue.

COMMISSION: NEVER WASTE A GOOD CRISIS
--------------


4. (SBU) In Nutter's meetings with DG Development officials, policy
coherence, the use of governance in programs and policy, and aid
effectiveness were recurring themes. Elena Peresso, an advisor to
the EU Commissioner for Development, pointed to a Commission study
that put the cost of lost efficiencies to the EU between 2005-2008
at 5-7 billion Euros. She said this alarming figure demonstrated
the importance of policy coherence at a time when strained resources
required cooperation and collaboration in the field, and added that
the financial crisis has made the EU "more creative", quoting now
former Commissioner for Development Louis Michel, who said "never
waste a good crisis". Peresso said the next three EU
presidencies--Sweden, Spain, and Belgium-were "like-minded and
pragmatic," "have their hearts in development" and would likely
support a dialogue. She said a letter written by World Bank
President Robert Zoellick to the leaders of the G-8 ahead of the
L'Aquila summit urging leaders to "direct their attention to the
world's poor" contained a number of opportunities that represent
"similar objectives" and could also inform a dialogue.


5. (SBU) Peter McQuaide, Head of Unit, Relations with International
Organizations in DG Development, noted that transitions on both
sides of the Atlantic madebut necessary."
In redestion that obstacles to 028
BUSTED

BRUSSELS 00001028 002.2 OF 003


be on the table, McQuaide agreed, noting that "if we're going to
have a more productive relationship, we will need to have difficult
conversations." On emerging donors, McQuaide said the EU had "made
some progress" with Brazil on tropical agricultural productivity.
He added that Mexico was working in three countries in Africa and
that Russia was reemerging as a donor in Africa as well.


6. (SBU) Maciej Popowski, Director of EU Development Policy,
outlined Commission thoughts on a development dialogue, which he
said represented a necessary "thematic platform" for senior
development policy makers. He said the Commission would hold an
internal discussion in late July before the summer break and would
work with the member states on the concept. Popowski agreed that a
series of joint EU-U.S. missions to Africa would be a good first
step in demonstrating the utility of a dialogue and might help push
the discussion to a political level. He suggested that European
Development Days in October represent an opportunity for policy
makers to explore this further and expressed his hope that a USAID
Administrator would be in place by that time. Popowski also cited
two future studies which could inform the dialogue: an EU piece to
be released next May or June on what to do beyond the MDGs in 2016,
and the other an OECD Working Party on Aid Effectiveness evaluating
same, also coming out next year.


7. (SBU) The European Aid Cooperation Office (AIDCO) Director of
Operations Francesca Mosca, and Head of Unit Jose Leandro gave
Nutter background on AIDCO's role, which Mosca said was to
coordinate overlapping development programs and responsibilities
among various mechanisms and ministries. She said issue coherence
"was a challenge", but noted there was "more flexibility in the
field at an implementation level" and said a dialogue would be
useful at both. She said her office was currently developing key
indicators on outcome and impact of development support. On budget
support, Mosca noted a European Parliament study that suggested
direct budget support saved transaction costs for recipients, but
not for donor countries. Leandro emphasized Commission policy on
governance as an objective of poverty reduction in the MDGs, but not
an objective in and of itself, and suggested this as a possible
dialogue discussion point.

MEMBER STATE ENTHUSIASM
--------------


8. (SBU) In a demonstration of the importance Finland attaches to a
dialogue, Riitta Oksanen, Head of Unit for Development Policy in the
Finnish Ministry of Foreign Affairs traveled to Brussels to meet
with Nutter. Oksanen said "the potential is there for a dialogue;
we should definitely give it a try." She agreed with the proposed
focus on food security, regional integration, and aid effectiveness
and said the Finnish Government's White Paper on development policy
"comes from the Foreign Minister himself" and touches on those
issues as well as all three pillars of development: economic,
social, and ecological. The White Paper recommends a more
comprehensive approach to private sector roles in development, which
Oksanen said had been "neglected" by policy makers. She said
recommendations included more funding in the field, new mechanisms
to support the private sector, and an emphasis on trade, with aid
for trade a priority. Oksanen emphasized "the conversation should
be more about development effectiveness rather than aid
effectiveness." She and Nutter agreed that a number of upcoming
development related events, such as the United Nations General
Assembly (UNGA),the G20 Summit in Pittsburgh September 24-25, and
October 2009 Bank/Fund meetings represented opportunities for
further discussion and refinement of possible dialogue topics.


9. (SBU) On July 8, the Finnish Ambassador to the EU, Jan Store,
hosted a lunch for Nutter attended by Finnish, Swedish and Spanish
development permanent representatives. Stressing the utility of a
dialogue, Store said, "We have not made the best use of what we can
do together", and posited that in order to improve, dialogue had to
take place at three levels: the senior level, the working level in
capitals (cooperation),and in the field (coordination). Ambassador
Store also stressed the need for internal EU coordination and said
Finnish development officials noted a number of occasions in which
member states "did not exchange views and did not cooperate" on
development.


10. (SBU) Swedish Development Counselor Marita Olson said Sweden was
"very keen and interested" in a dialogue and said the Swedish
Presidency would like to take the issue forward during European
Development Days October 22-24 in Stockholm. Olson said aid

BRUSSELS 00001028 003.2 OF 003


effectiveness and food security were priorities for the Swedes these
next six months, with governance and emerging donors as sub-topics.
She also said her office was interested in remittances, migration,
and division of labor, all of which could fall under the umbrella of
a dialogue.


11. (SBU) Spanish Development Counselor Felix Fernandez-Shaw
outlined his government's development priorities for the Spanish
Presidency taking office in January, 2010. Fernandez-Shaw said aid
effectiveness, division of labor, and the role of gender in
development would drive Spain's aid agenda. He also said Spain
would take up the issues of tax evasion and capital flight, which
represents three times the level of Overseas Development Assistance
(ODA),from a development angle, with developing countries losing
significant money and resources. He opined that, with the current
change in U.S. attitudes towards development and cooperation, "we
are in a stronger position to deliver" an effective development
dialogue, and hoped the U.S. and EU would work together to do so.

CHINA
--------------


12. (SBU) On China, DG External Relations (RELEX) Head of Unit for
China Franz Jessen said that while the Chinese made the "right
noises" on Africa, they really weren't engaging. He said the
Chinese go "wherever they have specific interests" and their goals
were more around securing markets than making a strong commitment to
economic development. Jessen said engaging China on development was
"difficult" and said Chinese confidece as a global player (and the
sixth largest investor in global FDI) suggests that "lecturing does
not work." The way the EU engages, he continued, is by "respectfully
reminding them" of obligations to which they and others have
ascribed, such as the Paris declaration. Jessen also noted the
Taiwanese were very active as well and were engaged in a bit of
donor competition with the mainland.

COMMENT
--------------


13. (SBU) In her Brussels meetings, Nutter heard strong general
interest in senior level policy discussions on development from both
Commission and member state interlocutors. As the Swedes make
development a high priority during their presidency, it is clear
that a continued exchange of views with them and the Commission on
the substance and format of such discussions could be productive.
Continued engagement with member states, such as Finland, and other
enthusiastic donors should also be pursued, as it would bring the
robust field perspective needed to support and provide value and
grist to a high level development dialogue, whatever form it might
take.

CHASE