Tue, Jun 26, 2012 - Page 7 News List

Eurozone austerity cuts aid to world’s poor

DOMINO EFFECT:Two reports showed that the EU’s pledge to give 0.7 percent of its output to nations in need was being compromised by the area’s economic crisis

The Guardian, LONDON

The flow of aid from Europe to the world’s poorest countries fell by 700 million euros (US$876.68 million) last year, the first drop for almost a decade as the crisis in the single currency caused 14 member states to cut development assistance.

Figures from the pressure group ONE showed that Europe had failed to meet pledges made at the Gleneagles G8 summit in 2005, and it warned that growing budget austerity had “spilled over into life-saving programs.”

ONE said the EU was way off track to meet its 2015 deadline for devoting 0.7 percent of annual output to aid and expressed concern that the commitment would be dropped in the current negotiations to decide spending by Brussels between 2014 and 2020.

ONE’s annual DATA report showed that two of the countries worst affected by the debt crisis — Greece and Spain — slashed their aid budgets by 40 percent and 30 percent respectively between 2010 and last year as EU financial assistance dropped by 1.5 percent.

Ireland and Portugal — both of which required bailouts from the EU and the IMF — made only small 3 percent reductions in their aid budgets, while Italy posted a 25 percent increase.

ONE’s Europe executive director Adrian Lovett said: “Huge cuts in aid from Greece and Spain are not unexpected in this time of turmoil, but the poor record almost across the board is worrying. Countries such as the Netherlands, the UK and Ireland demonstrate that it is possible through determined leadership and smart choices to protect aid budgets. Their example must be replicated.”

ONE said that the EU had fallen £18 billion (US$28 million) short of the aid pledge made at Gleneagles and had increased aid to Africa by £5 billion rather than the £16 billion promised. Despite increases by Italy and Germany, both countries had fallen well short of their targets.

“As European leaders mobilize huge sums to bail out their close neighbors, they must not forget their promises to Africa,” Lovett said. “The deal struck to protect Spain’s banks this month is five times what would be needed to get Europe back on track with its aid promises. While real progress has been made in Africa in recent years, the fact remains millions of people still rely on life-saving programs funded by smart aid.”

ONE’s analysis showed that the UK remained on course to meet its target for next year of increasing aid to 0.7 percent of national output.

“[British Prime Minister] David Cameron deserves real credit for his firm promise to reach the 0.7 percent target next year,” Lovett said. “It is vital that he uses his upcoming G8 presidency [next year] and negotiations over the next European budget to ensure all donors keep their promises.”

Europe’s leaders are currently haggling over proposals for a 1 trillion euro budget for 2014-2020, of which 51 billion euros has been earmarked for development. Some countries, including the UK, want the budget to be cut by 10 percent. Lovett said that aid should be ringfenced if this were to happen.

ONE said that documents prepared for this week’s EU summit made no mention of the 0.7 percent pledge, the first time it was omitted since 2007.

A separate report from AidWatch, which represents development groups in all of the 27 EU member states, came up with similar findings to the ONE study. It said that cutting aid was “becoming a habit,” with 11 countries cutting assistance last year and nine planning further reductions this year.

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