SENIOR EUROPEAN COMMISSION OFFICIALS AFFIRM

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. -------------- COMMENT -------------- ¶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 .