The EU must offer more trade incentives to Arab nations in exchange for true democratic progress after its aid system proved a failure, a study said Sunday just as the EU eyes a policy overhaul.
After giving billions of euros to authoritarian regimes for years, the European Union should threaten to suspend aid to Mediterranean neighbours that fail to implement true reforms, the Open Europe think tank said.
The revolutions that have swept across Tunisia, Libya, Egypt and now Syria "are a rebuke to the EU's preference for dealing with autocratic elites," said Open Europe analyst Vincenzo Scarpetta in a statement accompanying the report.
"For years, the EU provided direct funding to the corrupt and now ousted Egyptian and Tunisian regimes. Moving forward, Europe must establish a far stronger link between reforms on the ground and funding, with particular focus on boosting trade in the region."
The annual trade deficit of Mediterranean nations with the EU soared from 530 million euros (758 million dollars) in 2006 to 20.4 billion euros in 2010, said Open Europe, a pro-economic liberalisation think tank set up by British business leaders.
The EU should stick to its goal of creating a single European-Mediterranean free trade area, starting with the European Parliament approving a pending pact with Morocco, Open Europe said.
The group also called on Europe to scrap the Union for the Mediterranean and the 6.2 million euros earmarked this year for its running costs in Barcelona.
Championed by France, the Union for the Mediterranean has stalled due to the Israeli-Palestinian conflict.
The criticism comes as EU prepares a review of its "neighbourhood" policy in the wake of the Arab uprisings. Brussels proposed in March to more closely link aid to democratic reforms.
But not all 27 EU states agreed on the severity of the conditions to be attached on the funds, with southern Europeans less favourable to a strict line, a European diplomat said.
Open Europe said the 13 billion euros given by the 27-nation EU to countries in the Middle East and north African between 1995 and 2013 had failed to promote democracy and development in the region.
"Entrusting corrupt, autocratic regimes to make voluntary progress towards these goals, as the EU has done up to this point has clearly failed," the report said.