1. Possible impacts of Brexit on EU development and humanitarian policies
Iliana Olivié & Aitor Pérez
Brussels, 9 June 2017

2. Key figures and political responses to the impact of Brexit on EU aid
Brexit could have a major impact on EU development and humanitarian policies. Although there are still uncertainties about the UK’s new foreign policy approach and its repercussions on aid and the UK, the UK’s leaving would challenge the EU’s role as the world’s leading donor:
Aid managed by the EU Institutions may decrease by up to 15 %.
Aid provided by the Union as a whole may decrease between 18% and 20%
The EU would lose between 10 % and 13 % of its world aid share (currently in 58%)
Its presence, through ODA, in neighbour countries (Eastern Europe and North Africa) could be particularly affected, with a cut of between 1 % and 4 %, depending on the scenarios.
Furthermore, under certain scenarios, the Brexit process could end in a decrease of global aid estimated in 3%.
The EU can react to Brexit by adopting two distinct approaches to foreign policy and development cooperation: either it limits its role to that of a regional power or it grows to be a global leader. In the first approach, Brexit would have a very mild effect and would lead to very little policy challenges. However, in the second, the EU will need to compensate for the loss of Britain’s contribution to EU aid, both in quantitative and qualitative terms.

3. Setting the scene Focus OECD definition of ODA
Scope humanitarian and development aid - EDF, DCI, ENI, EPI, EIDHR, ISHA
Starting point: Member States contributions to the EU aid budgets
(net disbursements of 2015 ODA flows in millions of US current dollars)
2011
2012
2013
2014
2015
Germany
2.721,79
2.606,46
2.665,85
2.877,13
2.891,75
France
2.370,32
2.193,83
2.283,55
2.349,38
2.298,39
United Kingdom
2.054,94
1.995,65
2.041,19
1.922,33
2.159,53
Italy
1.901,32
1.598,04
1.618,10
1.661,58
1.695,62
Spain
1.105,30
990,67
1.028,47
1.024,67
1.077,18
Netherlands
677,74
637,88
649,82
647,32
647,69
Belgium
521,26
474,28
498,79
511,26
551,13 …
Total
13.974,42
12.922,73
13.269,31
13.663,89
14.132,23

4. Methodology Assumptions Variables Scenarios Impacts Policy options
The UK will leave the EU
The EU-28 will keep their financial commitments until 2020
The UK GNI and the GBP remain stable
EU GNI, the euro and other EU currencies remain stable
Aid of the other 27 MS will not be affected by Brexit
Variables
1. UK aid budget
2. British aid allocation (only applying to aid formerly channelled via EU institutions)
3. British willingness to collaborate with the EU in development (only applying to aid formerly channelled via EU institutions)
Scenarios
1. Nationalist UK
2. Realist UK
3. Cosmopolitan UK
Impacts
1. Financial
2. Political
3. Operational
Policy options
EU policy options regarding aid volume
EU policy options regarding its share of global aid and ODA in the neighbourhood
EU policy options regarding its reliance on alternative channels of aid

5. Three scenarios for post-Brexit UK aid Setting the scene
Scenario 1
Nationalist UK
Scenario 2
Realist UK
Scenario 3
Cosmopolitan UK
1. UK aid budget
- 30 %
Same
2. British aid allocation
Realist pattern
Channel distribution following British pattern of bilateral aid
Geographical distribution, accordingly
Sector distribution, economic infrastructures only
European-like pattern (50 % of aid)
Same channel distribution
Same geographical distribution
Same sector distribution
Globalist pattern (50 % of aid)
Channel distribution following British pattern of multilateral aid (except EU institutions)
Sector distribution, accordingly
3. British willingness to collaborate with the EU in development
No collaboration
Collaboration (50 % of aid formerly channelled via EU institutions channelled via EU institutions in the post-Brexit phase)

6. The impact of Brexit on EU aid
Pre-Brexit
(USD millions)
Post-Brexit 2
(variations - %)
Nationalist UK
Realist UK
Cosmopolitan UK
Financial impact
EU-managed aid
13 6701
-15 %
-7.6 %3
Global aid
160 600
-3% 0%
Political impact
All-EU share in global aid
58 %
-10 %
-12 %
-11 %
All-EU share in the multilateral system
61 %
-9 %
12 %
All-EU commitment: ODA/GNI %
0.44%
-0.01%
Aid received by EU neighbour countries
28 606
-4 %
-2 %
-1 %
EU institutions rank in global aid #4 -
Operational impact
Global bilateral aid
65 359
2 %
Global multilateral aid
37 090
Global aid through
58 152
-5 %
Net disbursements of 2015 ODA flows in millions of US current dollars
Our estimates for each scenario based on 2015 data and assumptions
Including UK contributions to the EU aid budgets
Source: (DAC1); last accessed 9 February 2017

7. EU policy options Post-Brexit scenarios Nationalist UK Realist UK
Cosmopolitan UK
The EU, as a global leader
Increase of EU aid
+15%
+7.5%
Possible reallocation in support of globalist partners (UN, CSOs)
The door open to the UK:
EU toolkit provides different opprtunities to cannel UK contributions
The EU, as a regional power
Refocus on the neighborhood
Stronger EU integration in development cooperation
Political attention and policy development will be oriented to deeper EU donor coordination
UK might preserve its commitment regarding aid efforts (scenarios 2 and 3) or reduce its aid levels (scenario 1).
According to recently published strategies and political statements, aid could be reshaped in different ways (European-like pattern, following the multilateral review; Realist-type allocation to infrastructures or security…)
The EU can cope with this situation by upgrading to a global development player (particularly in the event of British aid cuts) or concentrating on the neigbourghood.
From the administrative point of view, in this development field, Brexit does not necessarily means Brexit, (trust funds, NGOs settled in member states…).
However, politically, the EU-27 might give UK a hard time (something that will depend to a great extent on the political position of Germany).

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