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ELM News ImageCommission calls for more predictable and more effective development aid

Three communications adopted by the European Commission demonstrate that on the whole the EU is on the right track regarding compliance with its commitments to greater public development aid, aid for trade, and aid effectiveness. But further efforts will be needed if the objectives of giving more predictable and sustained aid and of improving coordination and aid effectiveness are to be brought within reach.

According to figures for public development aid published by the OECD yesterday, the European Union is continuing to increase its aid effort and is consolidating its status as the world's leading donor, giving 57% of total aid. In 2006 European aid rose to 0.42% of GNI, exceeding the 0.39% objective set for the year. In real terms European aid (Member States plus Commission) in 2006 ran to some €48 billion, nearly €100 per citizen per year. By way of comparison, aid given by the United States and Japan was about €53 and €69 respectively.

"The documents approved today demonstrate the EU´s clear political determination; the EU is honouring its ambitious commitments on the development aid front," said Louis Michel, European Commissioner for development and humanitarian aid. "But we now have a twofold challenge to take up. First, we must honour our promises by giving our partners greater and more predictable aid; second, our effort must be spread fairly and each Member State must honour its own commitments, which is not the case for some of them at the moment."

In 2006 Sweden, Denmark, the Netherlands and Luxembourg devoted more than 0.80% of their national income to development aid, and Sweden was even above the 1% mark. What is just as remarkable is that the ten Member States that joined the EU in 2004 have doubled their development aid since then.

But the countries that have lagged behind their individual goals have shown that they are determined to catch up in the two years ahead.

External debt forgiveness for the developing countries is a great boost to development and reducing poverty, and it counts as development aid on the OECD criteria. But it is still by definition a one-off measure. The challenge for the next few years will be to continue increasing development aid overall while reducing the debt-relief component.

The communication on aid for trade reports that the poorest countries´ share of international trade remains marginal in spite of the tariff preferences they enjoy, especially on the European market. The Commissioner in charge of external relations and neighbourhood policy, Benita Ferrero-Waldner, said: "Through aid for trade, the European Union is able to offer valuable assistance for developing countries in their efforts to reform, to adjust to the world trading system and to promote growth. The communications agreed today show a positive record in EU aid and assistance to developing countries in recent years, but also indicate a collective desire to build on this in the years ahead. Our proposals are aimed to ensure both more, and better, assistance in the future."

Trade Commissioner Peter Mandelson said: "The EU is already the biggest importer from the developing world and the world's most open market for developing countries. Building on the EU's record for openness to developing country exports means helping these countries build the capacity to trade more. This is an important new focus for EU aid and development policy."

In 2005 the EU committed to raising its annual aid for trade effort to €2 billion by 2010, half of it to come from the Commission and half from the Member States. With their current €300 million, the Member States are far from reaching their target, whereas the Commission is already giving €840 million. A renewed effort will be needed. Among other measures the Commission is proposing an intermediate target of €600 million for the Member States in 2008, a sizeable proportion of the resources being earmarked for the ACP countries in the context of the Economic Partnership Agreements (EPA) which the Commission is currently negotiating with six regional groupings.