UNCLAS SECTION 01 OF 02 BRUSSELS 000529

SIPDIS

NSC FOR KRISTINA KVIEN

E.O. 12958: N/A
TAGS: EAID PREL IO EAGR EUN ECON EFIN
SUBJECT: SENIOR EUROPEAN COMMISSION OFFICIALS AFFIRM
INTEREST IN TRANS-ATLANTIC DEVELOPMENT DIALOGUE

REF: BRUSSELS 00450



1. SUMMARY: During recent meetings with Acting USAID
Administrator Alonzo Fulgham in Brussels, senior European
Commission (EC) officials responsible for both policy and
operational matters affirmed strong interest in elevating
development to a more visible role within the ongoing
trans-Atlantic dialogue. On the policy side, one suggestion
included regular senior meetings following the EU-US summit
in June, possibly involving a troika approach. At the same
time, all sides agreed that any renewed dialogue would suffer
the same fate as a similar, short-lived effort launched
nearly a decade ago if it did not also lead to better and
more effective aid delivery in the field. END SUMMARY.


2. During a stop-over in Brussels following the Afghanistan
conference in The Hague, Acting USAID Administrator Alonzo
Fulgham met separately with Director General for Development
and Relations with African, Caribbean and Pacific States
(ACP) Stefano Manservisi, and with Director General of
EuropeAid Koos Richelle. Both officials - Manservisi oversees
EC development policy and programming to the ACP countries
while Richelle has responsibility for implementing all EC
development programs - expressed strong support for a renewed
EU-US dialogue on development during the months ahead.


3. Manservisi stated that the Commission sees new political
opportunities with the arrival of a new administration in
Washington. In his words, I have never seen the development
agenda so high r so relevant, adding that if we do it right,development policy
can become a major part of or broader
policy approach on other issues. I his view, the discussion
should take a long term perspective rather than being driven
by ad hoc, immediate concerns. Simply increasing contact and
furthering understanding about our respective approaches to
development would be a step forward. Looking ahead to the

EU-US summit in June, he suggested that a high level
mechanism for regular engagement on development needs to be
put in place, possibly using a troika-like approach that
would include representation from the Commission, Council and
Presidency.


4. Manservisi also briefly commented on broader development
issues. While emphasizing the need to meet official
development assistance (ODA) commitments, he acknowledged the
emergence of a more complex development terrain, noting in
particular remittances, private investment and contributions
from foundations as important new sources of investment.
Despite the global economic crisis, trade facilitation
efforts need to continue. The EC also attaches special
importance to regional approaches, with Manservisi noting
that the EC and EU member states set aside two billion euro
to fund regional programs. In this regard, he specifically
cited the February 2009 EC-USAID consultation in Brussels on
economic integration in Africa as a positive example of EU-US
cooperation.


5. Manservisi acknowledged fragmentation as an issue that
the EC is attempting to address, partly through its promotion
of a code of conduct aimed at ensuring that the EC and
individual member states work together in their pursuit of
common development objectives. Good governance is another
area of increasing EC concern. In addition, the EC welcomes
the elevation of climate change to a more important part of
the U.S. development agenda. In keeping with both Accra and
the Paris Declaration, there is strong EC interest in budget
support. According to Manservisi, nearly fifty percent of
all EC aid funding in Africa, the Caribbean and Pacific
involves budget support. In his view, budget support is an
especially powerful implementation tool because it is focuses
less on procedures and more on results.


6. Finally, Manservisi confirmed that he will attend the
World Bank meetings in Washington in late April. He added
that the EC delegation in Washington is developing his
schedule and that he hopes to meet with a broad range of U.S.
actors involved in development policy, including counterparts
at the National Security Council (NSC).


7. In a separate meeting the following morning, EuropeAid
Director Koos Richelle also emphasized support for a
revitalized trans-Atlantic development dialogue, though
noting that a similar effort launched nearly a decade ago

BRUSSELS 00000529 002 OF 002


proved unsustainable. In his view, the ideological divide
between Brussels and Washington has now been narrowed. In
addition, the global financial crisis gives added urgency to
the discussion. Among other things, he expressed concern
over reduced capital flows to the third world as well as an
over-reliance on foreign assistance in some countries such as
Mozambique. While acknowledging support for public-private
sector partnerships, Richelle bluntly stated that so far the
EC has no good examples of success. Welcoming the Acting
USAID Administrator's comment that this could be a fruitful
area for future EU-US dialogue, he suggested that the sharing
of US experience on global development alliances would be
especially helpful and that a broad range of counterparts
within the EC could usefully attend.


8. Richelle also expressed strong EC interest in budget
support, though noting the need for more discussion on the
criteria and framework for delivering it. Acknowledging
governance, capacity and accountability as key concerns, he
suggested that the US and EC could learn from each other's
experiences delivering and monitoring direct budget
assistance and noted the EC now provides budget support to 55
countries. More broadly, Richelle cited a need to draw new
donors such as India and China into the global development
discussion. He also sees interest on the part of several
emerging economies (he specifically mentioned Brazil, Mexico,
South Africa and Thailand) in becoming a conduit for
assistance to poorer countries, suggesting that their
experience might make them both more credible and more
effective in terms of delivering foreign aid.


9. As always, Richelle's comments reflected a strongly
candid and pragmatic approach. He also emphasized that a
renewed trans-Atlantic dialogue on development, if it
emerges, needs to focus on operational concerns, not elegant
theories. Describing EuropeAid as the slaves in the cellar
with minimal policy authority but responsibility for actually
delivering assistance, he also highlighted the importance of
ensuring that policy discussions are rooted in field
realities.

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COMMENT
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10. The two meetings confirmed broad EC interest in a
renewed EU-U.S. development dialogue and echoed many of the
themes highlighted in Reftel. In addition, there was an
interesting symmetry to both meetings, with one featuring the
key EC official responsible for development policy and the
other involving the senior EC official charged with
implementation. While also commenting on U.S. views and
experience in several areas (including budget support), the
Acting USAID Administrator reiterated that any extended
EU-U.S. conversation must lead to practical, tangible
results. Among other things, that means ensuring that any
strategic dialogue on development makes an operational
difference and leads to more effective aid delivery in the
field.


11. Acting USAID Administrator Fulgham cleared this cable.

MURRAY
.