The External Reach of the Union

Abstract

The European Union has gradually, albeit in a piecemeal manner, amassed a range of financial policy instruments to deploy outside its borders. Money has come to play a central role in the Union’s search for a role in world politics since spending on what might be broadly termed foreign policy actions grew significantly since the mid-1980s. The Edinburgh Agreement of December 1992, which envisaged a doubling of external spending between 1993 and 1999, represents the most sizeable increase in the financial resources available to the EU for external action ever agreed. External expenditure (EU budget and European Development Fund) has grown from 3.3 billion ECU in 1990 to 7.3 billion ECU in 1995. Although external actions constitute only 5.4 per cent (1995 budget) of total budgetary expenditure, there has been a dramatic growth in the Union’s external financial commitments and the range of policy instruments deployed across the globe. Direct budgetary expenditure is augmented by the dramatic rise in the international lending activities of the European Investment Bank. The Union’s external policies provide a powerful lens though which to analyse the Union’s international capacity. This chapter examines the nature of the EU as a player in world politics, the financial policy instruments it deploys and its relations with different parts of the world.