EU aid exaggerated

Development ministers are being urged to change the way they give money to poor countries following a report which shows EU aid is exaggerated.

The ministers will be meeting on Monday and Tuesday following the report’s publication tomorrow (11 May) which shows that member states used debt cancellation and funding for foreign students and refugees in Europe to inflate their 2006 aid figures.

Nearly one-third of EU development assistance, or €13.5 billion, last year was written off in this way with all but two countries (UK and Ireland) of the ‘old’ 15 member states "tying" their aid to their own goods and services, according to the report by Concord, an umbrella group for European non-governmental organisations (NGOs).

The report follows the publication last month of official aid figures which showed most EU states were on target to reaching their commitment to deliver 0.7% of gross national product by 2015. But Concord says that not all the money is going to help alleviate poverty. NGOs are to protest outside the development ministers’ meeting in Brussels to highlight the problem.

Debt write-off for Iraq and Nigeria formed the biggest part of the ‘inflated’ debt at €10.5bn, while €1.7bn went on educating foreign students in Europe and €1bn was spent on refugees housed in Europe.

The report warns that countries are not on target to deliver on their aid promises and that if the situation is not changed poor countries will have received €50bn less from Europe by 2010 than they had been promised.

The worst donors of genuine aid are Italy (0.11% of GDP), Greece (0.15%), Portugal and Austria (both 0.2%). The best performers are Sweden (0.9%), Luxembourg (0.87%), Denmark and the Netherlands (both 0.74%), according to the report.

Development ministers are being urged to change the way they give money to poor countries following a report which shows EU aid is exaggerated.