Brussels, 08/04/2009 (Agence Europe) - In a communication adopted on Wednesday 9 April 2009, the European Commission recommends that the EU steps up its action to help developing countries deal with the financial and economic crisis. The communication comes a week after the G20 summit and is part of the process of following up on the Monterrey development aid targets (see EUROPE 9878). Already weakened by high food and oil prices, the world's poorest countries are particularly vulnerable: “Growth is slowing and unemployment is rising and there is a risk that the Millennium Development Goals (MDGs) are in jeopardy and the gains of this last decade will be forfeited,” explains the Commission. In the communication, it recommends approximate, coordinated and targeted EU action, calling for the public development aid (EPA) promises already made to be honoured and for further aid to be provided. EU Commissioner Louis Michel said at a press conference that while in the EU the crisis means unemployment, in the poorest countries it often means regression, instability, desperate poverty, deprivation and even death. He hopes to keep the pressure up on member states and international donors.
The president of the European Commission, José Manuel Barroso, commented that the recession must not and will not be used as an excuse for the EU not keeping its promises to increase aid. He said that while the EU is the world's biggest provider of aid, some gains might be lost, plunging poor countries into a worse situation than before the crisis. In 2008, the EU provided €50 billion in aid, that is, 0.40% of EU GDP (0.42% of the GDP of the old 15 member state EU). In order to keep its promises of €69 billion or 0.56% of GDP in 2010, it will have to increase the amount of aid provided by €20 billion in 2010, explained Louis Michel. The Commission points out that the outlook for the future raises concerns and it hopes to activate other resources from the European Investment Bank (each euro paid out in aid should be able to mobilise up to €5 in private investment). The Commission recommends that the member states “apply more widely innovative sources of financing, for example building on ongoing voluntary solidarity levies, such as the airline tax to finance health programmes”.
In order to be effective, immediate action is required, explains the Commission, wanting to make procedures more flexible. “Measures should be taken to adapt priorities, disburse aid more quickly and, where necessary, frontload assistance and accelerate budget support,” comments the communication. To this end, the Commission has brought forward €4.3 billion in EU aid for ACP countries from monies earmarked for 2009 (€3 billion for budget aid, €800 million for the food fund and €500 million for ad hoc FLEX mechanisms to support welfare spending).
The inefficiency of the aid provided is leading to too much money being wasted. “The volatility and lack of predictability of aid alone can increase costs by between 15% and 20%” explains the communication, noting that this is the true cost of Europe not being present for development. By working better together and implanting the principles agreed upon last year, the 27 member states and the European Commission could make genuine savings of some €5 billion to €7 billion a year.
In order to soften the impact of the crisis on society and support the real economy, the Commission wants work to focus on infrastructure, breathing new life into farming, encouraging trade and combating climate change. The communication (along with related documents) can be found at: http://www.ec.europa.eu/development/index_fr.cfm. (A.B./transl.fl)