01-03-2010 MEP Guerrero Salom Drafts Report on the Effects of the Financial Crisis

Developing countries are not the root or cause of the financial crisis, yet the effects of it have shown to be devastating for the poorer countries. It has become an economic, social, development and humanitarian crisis. Every field of activity has been effected. Unemployment levels have increased, there has been more migration and therefore brain drain, drop in prices of raw materials, decrease in development finance, greater debts and especially a drop in trade. The EU has increased its trade restrictions to protect its own market and has cut back on all development efforts. Within the Development Committee (DEVE) of the European Parliament, an own initiative report was taken up on this subject, with Enrique Guerrero Salom as rapporteur.

In the report, Guerrero Salom (S&D) states that "it is clear that the resources promised [by the international community] have not reached these countries and that the reform announced have yet to be put into effect." As the fair politics team we are happy to proclaim Guerrero Salom as a fair politician for contributing to more coherence for development by raising issues such as financial regulation, migration, economic partnership agreements (EPAs) and agricultural subsidies. All these issues have contributed to the crisis in the first place and facilitated the harm done to developing countries. The deregulation of the international market and the gambling of investments, which was enforced on these countries through tied aid and conditionality, is to blame for the crisis. The illicit financial flow from developing countries, which is many times more than the total amount of development aid, is tax revenue that these developing countries are missing out on. The lack of tax revenue because of tax evasions, which are possible because of incompatible tax regulations, has made coping with the crisis for developing countries many times more difficult than for Europe. Furthermore Guerrero points out the effects the crisis will have on migration remittances, future EPA negotiations and export revenues for the developing countries. The amendments on the Guerrero Saloms report were many, but little contributed to making politics more fair and coherent. The political group of the Greens/EFA did rephrase points that Guerrero made, to make them stronger.

In reaction to the DEVE report, the Committee on International Trade adopted an opinion, with Maria Muniz De Urquiza (S&D) as rapporteur. Her draft was short but strong. She most importantly calls on the Commission to respect the priorities of each country and to ensure consultation of all key actors (including civil society) during the negotiations and implementation of trade agreements, in particular the EPAs. This would strengthen EU Policy Coherence for Development. Furthermore she advocates for the continuation of the fight against protectionism. Although the positive effects on developing countries of liberalizing trade is questionable, fighting EU protectionism will facilitate export in developing countries. For her strive to make EU policies more coherent, especially in the name of development, we acknowledge Maria Muniz De Urquiza as fair politician as well.

To our pleasant surprise the Committee on Economic and Monetary Affairs (ECON) also submitted an opinion on the DEVE report. We were very much impressed with their effort to promote Policy Coherence for Development (PCD). Jurgen Klute (GUE/NGL) as rapporteur, will therefore also receive a fair politics point. He calls on the EU commission and the international community as a whole to take on the responsibility to help the developing countries. Subjects like EU agricultural subsidies, protectionism, migration policies (especially concerning brain drain and remittances that support development), and tax governance were reoccurring topics in the opinion. Besides a good first draft of the opinion, the amendments were pleasantly surprising as well. Amendments in favour of PCD were adopted. Sven Giegold (Greens/EFA) emphasized the importance of PCD and the disastrous effect and importance of combating tax havens. Sari Essayah (EPP) also focussed on PCD but also brought up issues of agricultural subsidies, biofuels and food security and tax havens. Edward Scicluna (S&D) referred to migration and brain drain issues and Olle Schmidt (ALDE) called for more attention on the effects of EU agricultural subsidies. Fair Politics recognized all these members of European parliament as fair politicians.

All in all many of the Fair Politics case studies were mentioned and we hope that the report and opinions will contribute to more coherence within the EU policies so that the effects of the financial crisis can be diminished.

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