Loan System Reform | European Council Discussion

Inimicus

First off, I find the insensitive branding of nations with a GDP that doesn't meet the exact standard the United Duchies sees fit as "poor" to be extremely unhelpful and, frankly, offensive. The entire discussion about this loan reform thus far has been patronising and demeaning to equal members of this Union who deserve far more than many councillors' pity.

That said, Inimicus must oppose Commissioner Biden's proposed reform. The EDA, such as it is, absolutely needs more funding, as it seems many nations appear to be interested in European-sponsored low-interest loans. However, splitting the EDA into two separate agencies is unnecessary and only adds to the divide between Cllr Mizrachi-Roscoe's "rich" and "poor" countries. Who gets to apply to the premium high-level rich kid EDA and who is consigned to the poor man's back alley EDA? What are the thresholds maintained? This reeks of arbitrariness and insensitivity to what is actually happening not only in people's daily lives but in the rooms of all our government administrations.

Nicholas Benfield
Deputy Speaker

Elthize

I am confused. Commissioner Biden, what does it mean when the agency will receive funds only once? Does it mean that the agency will be given money for one time and then it'll be left on its own?

Liam Zachary, Councillor for Elthize

Lusitanovetonia

I think he means that it will be financed by interest, like a bank.

Federal Republic of Lusitania and Vettonia
President of the Republic: Augusto Domínguez
Governor General: José Miguel Orato
European Councillor: Luis Castro

BrumBrum

Yes it means he plans to reform it to become a slave master to developing countries debt trapping them into a cycle of poverty and bankruptcy all so a few rich nations can get off lighter on contributions! This is nothing more than a screw you to developing nations!

James Mizrachi-Roscoe , Councillor for United Duchies

Kingdom of Reitzmag

I think I have to be clear on my point, and also frank, Mr. Roscoe this is not a screw you to developing nations but a screw you to hugely developed countries that are trying to abuse the system by asking for interest-free or low-interest loans for a multi-million euro project.

Members of this honourable chamber, the main aim as to why I wish to put forward a reform is to help developing countries in their endeavors with an exclusive fund for them whilst also maintaining a loan system accessible to anyone who is capable of paying a debt and the interest. So as not to lose track of what has been modified, here is the new proposal I have in mind considering the comments from all members:

Split the EDA into two agencies, the European Development Fund which will be funded every year by the EU and is reserved only for developing countries and the European Credit Agency which will be funded only once by the EU and is accessible to all EU members.
The European Development Fund will be allowed to provide grants and interest-free loans to developing countries therefore preventing them from being debt trapped and ensuring the budget for the agency is not drained.
The European Credit Agency will not be allowed to provide grants and interest-free loans, since this agency is most likely to cater developed nations that are capable of paying back a loan with its interest.
The European Credit Agency will be responsible for growing its own funds from interests, and the interest rate for each loan will be left to their decision making body. Low-interest loans will still be allowed, so that developed EU member-states will remain to enjoy low-interest EU-sponsored loans but not interest-free loans or grants.
The European Development Fund will set the threshold on which nations are allowed to make use of their services based on economic factors such as GDP, GNP, Average Income, or etc. This threshold will be set every year, or on an interval agreed when the bill for this proposal is already in debate.
The European Development Fund and European Credit Agency will be secured a minimum budget amount, based on what is agreed. We foresee that this value is not less than 1 billion Euros.

Members, my aim for this reform is simple. Fix our financial system and ensure a large flow of progressively development across the region, and I believe that this such reform is necessary to aid in that goal. But the ultimate decision lies in you the member-states who make up our union, and so I shall respect whatever the ultimate decision may be.

Sir Joseph William Amberton Biden Sr. GCVO
Premier Commissioner, European Commission

Istkalen

Mr. Biden, you are right, this is not an insult to just developing nations but an insult to everyone. No one has asked for this, there is no support for this, it is a nonsensical and unneeded neoliberal scheme that will only hurt rather than help.

Ilmaras Kalessed
Internal Affairs Commissioner

BrumBrum

Mr Biden United Duchies was long proposing highly restricting funds rich nations can claim but it was told by other nations at the time that apparently we were "undermining European solidarity principles" and that rich nations should be able to claim now rich nations are following EU guidance and the guidance of Eurocrats the richer nations are being demonised for doing what was suggested and blamed for "taking resources for poorer nations". Either EU wants a fully funded big fund with all claiming or it wants all help directed to poorer nations it cannot have it both ways. This is the fault of EUfanatics like Junker who were the ones telling nations like Duchies they should be able to claim funds in the first place. We are simply playing by the rules and values that we were told the system runs by , don't blame richer nations for claiming when they were told the fund was for them too. This is on the EU.

James Mizrachi-Roscoe , Councillor for United Duchies

Duxburian Union

The Union of Duxburian Dominions will not support a program it cannot use. If our funds are taken for an EU level program, then our entities need to be able to apply to use it, same as anyone else.

"Rich countries" and "poor countries" are not the only applicants, assuming every applicant is even a country is wrong to begin with. The Duxburian federal government only funds domestic projects that span across federal domain, things that cross dominion borders. Projects within a dominion or municipality are the exclusive responsibility of those areas, which may be "rich" or "poor" themselves. The national GDP or average income don't have any relevance to whether Azrekko can afford to move to solar power, if Laatzen can protect its dying coral reefs, if Niko can maintain its underground train system, etc.

If a developing nation feels that a deal is predatory, it can simply choose not to sign? If you sign a written agreement, you consent to its terms and thus by definition are not being exploited. That whole angle is nonsensical.

We feel the current structure of the EDA is fine, it just needs more funding. It's pretty rare that the Union of Duxburian Dominions supports increasing the EU budget, so don't blow the opportunity by excluding us from that which you seek to fund.

Wesley Greene
Councillor of the Duxburian Union

UK and California

California will support this. Developing nations need this.

Andrew Charlton
Councilor for The Republic of California

Istkalen

With all due respect, Cllr. Charlton, the European Development Agency as it is provides adequate funds for all. The proposal of Commissioner Biden is merely to force the EDA to act as a business - which, as a development fund, it must absolutely not - and to force it to wring whatever money it can from the member-states of this Union merely to stay afloat, all in the name of financial conservatism that can barely be differentiated from libertarianism.

Ilmaras Kalessed
Internal Affairs Commissioner

BrumBrum

With all due respect Biden you ran on listening to nations. Very few nations are supporting this and are in fact saying let's give the EDA more money , its especially significant the DU are when they usually don't support budget increases. Don't squander that , you have the oppurtunity with nations blessing to deliver a bumper boost to the EDA and increase the budget , yet you are trying to cut its funding so it can only gain off loan interest. This reform is clearly not wanted or necessary and will only lead to harm. In fact cutting off big nations from grants actually makes it more likely bigger nations will in fact support budget cuts in the future since if they cannot get grants why put money in. This sort of system works best if everyone can feel the benefit and that includes if richer nations can get grants and interest free loans , after all they pay in so why should they be penalised. Now if you want to say 40% of funding is ringfenced for Lower Income Per Capita nations go ahead , thats a sensible move we would support but to remove all grants and interest free loan options from bigger nations is only going to incentivise them to call for cuts and that is not good for anyone.

James Mizrachi-Roscoe , Councillor for United Duchies

Lusitanovetonia

We totally agree with the positions expressed by the honourable councillors of United Duchies and Istkalen in everything they have said.

Federal Republic of Lusitania and Vettonia
President of the Republic: Augusto Domínguez
Governor General: José Miguel Orato
European Councillor: Luis Castro