EU should re-write aid rules to fund local actors, says aid expert

The EU should re-write its rules on aid that currently prevent it from providing funds to organisations that are not based in the EU, leading aid charity Caritas has urged. 

Donor governments and international aid actors are under growing pressure to increase their use of local actors to lead and deliver humanitarian aid.  

With EU and national aid budgets facing cuts in the wake of the costs incurred by governments as a result of the COVID-19 pandemic, aid experts argue that using local NGOs and other actors would be a more efficient use of funds. 

Meanwhile, the ‘localisation’ agenda would also strengthen the capacity and resources of local organisations to respond to crises and promote long-term sustainability, they add. 

However, the EU’s internal rules prevent the bloc from funding local groups directly – the European Union’s humanitarian funds can only go to EU-based groups and UN agencies. 

The EU’s initial annual humanitarian budget is €1.7 billion for 2023, although final spending is likely to be significantly higher because of supplementary funds being added to cope with emergencies. In 2022, the EU’s final humanitarian budget was €2.62 billion, €440 million more than the year before. 

“The EU should explore the possibility to directly fund local and national actors,” Jean-Yves Terlinden, Humanitarian and International Development Director for Caritas Europa, told Euractiv. 

“This could and should be changed,” he added, referring to the Commission’s rules on only financing EU-based organisations, pointing to ongoing pilot projects by the US agency USAID, in which they directly fund local actors. 

Terlinden added that the EU could also make more use of country-based pool funds operated by the United Nations, provided that the UN can guarantee that these funds are channelled and made accessible to local NGOs. 

Earlier this year, the Commission’s humanitarian aid department, known as DG ECHO, sought to launch new guidelines on “promoting equitable partnership with local responders”, aimed mostly at the big international NGOs and UN agencies that get the bulk of EU humanitarian funds, and who would be expected to channel EU cash to grassroots groups. 

However, international NGOs have expressed concern that this would shift the administrative burden and financial risk onto them.  

Meanwhile, the changes would be minimal since separate EU regulations place a cap of €60,000 on what can be reallocated. 

In a report published this week, Caritas Europa, a Catholic aid charity, urged the EU and donor governments, along with UN agencies and international NGOs, to honour their commitments by ensuring transparency in tracking how funds are distributed. 

The report, which assessed the top ten government donors, including the European Commission, Germany, the United States, and international actors, including UN agencies, found that local aid actors from six different regions rated Germany the highest followed by the European Commission. However, France was ranked the lowest of the ten government donors. 

[Edited by Nathalie Weatherald]

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