Commission to denounce member states’ aid failures

The European Commission will next week highlight member states’ failure to live up to promises to give more aid to developing countries.

Some member states are not meeting targets to increase aid while collectively they are €600 million short of a pledge given by all 27 countries to give €1 billion annually to developing countries to help them trade better.

Development Commissioner Louis Michel will on Wednesday (4 April) propose strategies for meeting these targets and promises following publication on Tuesday by the Organisation for Economic Co-operation and Development (OECD) of its report on how countries are performing in aid donation.

Italy, Greece and Portugal are the countries lagging most behind in meeting aid targets - set at 0.56% of gross national product (GNP) by 2010 and 0.7% of GNP by 2015.

Last year EU member states on average spent 0.42% of their GNP on development aid - higher than the target of 0.39% set for 2006. Some states such as Denmark, Luxembourg, Netherlands, Sweden, Finland and Austria, are well beyond the targets while Germany and Spain have shown good progress in boosting their figures.

But controversially some member states’ figures include debt cancellation for Nigeria and Iraq, a move criticised by development non-governmental organisations as not representing real aid since often it means writing off debts owed to foreign industry.

"This is money for European export credit agencies. It is not for development purposes. It is essentially a subsidy for European industry," said Lucy Hayes of Eurodad, an umbrella group representing aid organisations.

Much of the debt for Iraq and Nigeria was written off last year and shows up in aid figures for France, Germany, the UK, Italy and Austria, but in years to come aid figures for these states will drop when debt cancellation is no longer a factor, Hayes added.

"It still remains one measure of aid and alleviating external debt can count but it is not sustainable and not as predictable," said a Commission spokesman.

Michel will publish plans for a strategy to ensure that aid is delivered from member states and the Commission in a more coherent way by focusing on how their budgets are planned.

The commissioner will also push member states to sign up to an aid-for-trade plan to reach an annual €1 billion commitment from 2010 to help developing countries bring in trade reforms. The Commission also pledged €1 billion and has earmarked some €850 million of this so far. But member states have come up with less than €400 million.

Delivering on this promise was important for helping conclude the Economic Partnership Agreements currently being negotiated with developing countries and for EU states to appear credible on aid pledges, the Commission spokesman said.

The European Commission will next week highlight member states’ failure to live up to promises to give more aid to developing countries.