EU pays out record €6.5 billion in aid

European Union citizens are twice as generous as citizens of the United States in terms of committing government finance to poor countries, according to EuropeAid, the European Commission's department tasked with implementing external assistance and development aid.

Figures released in Brussels last Wednesday week show that last year the Commission, through EuropeAid, committed a record €7.6 billion and disbursed €6.5 billion, 55 per cent and 58 per cent respectively since the 2001 reforms in aid policy. More projects and programmes were implemented than ever before.

The European Union (the 27 member states and the Commission) is the world's most open-handed donor, providing 52 per cent of global development aid - as opposed to the US's 24 per cent - to over 150 countries and territories, and in most spheres enjoys a reputation as a kind-hearted but assertive benefactor. On its own, the European Commission is the second largest donor of humanitarian aid after the US and the fifth largest donor of development aid after the US, Japan, France and the UK. The EU is also the developing world's biggest trade partner.

"In 2006, the EU promised to increase aid, improve co-ordination among European donors and focus on Africa to achieve the Millennium Development Goals," Louis Michel, the Commissioner for Development and Humanitarian Aid said.

"We are delivering record contracting and payments for programmes in African, Caribbean and Pacific (ACP) countries, major investments in water, energy and other infrastructure, support to peace operations in Darfur, and assisting in the successful running of elections in the Democratic Republic of Congo."

The Commissioner responsible for EuropeAid, Benita Ferrero-Waldner, said she was "particularly proud that the Commission was able to develop the Temporary International Mechanism (TIM) allowing aid to continue to flow to the Palestinian people under the most difficult political circumstances, not only from the Commission but other donors as well. The Commission's internal reforms have borne fruit: the Commission is now a donor that delivers on its promises and not only meets the best international standards, but leads the way for others."

Presenting the figures for EU external aid for 2006 to the international press, Koos Richelle, the director general of the EuropeAid Co-operation Office, said: "Things are happening. The member states are putting more money on the table."

With a shift towards the achievement of tangible results and change in assistance countries rather than just throwing funds their way, Brussels is optimistic that it is on the right track in the international context. Following the establishment of the UN Millennium Development Goals in 2000 to which the global community pledged to work to achieve, the EU announced the European Consensus in 2005, tying both member states and the Commission to adopt a common policy towards development for "more, better and faster aid".

The 'new concept' trio presidency of Germany, Portugal and Slovenia has drawn up an 18-month programme on development policy which includes a commitment to give the EU a leading role in the implementation of the Paris Declaration on Aid Effectiveness and the EU's Strategy for Africa, a shared vision for relations between the two continents for the years ahead, while further integrating ACP countries into the global economy under a revised Cotonou Agreement.

Meanwhile, EU member states are soon expected to ratify the 10th European Development Fund, which is not part of the EU budget.

Malta contributes just under 0.2 per cent of its Gross National Income. The largest contributors to overseas development aid are Luxembourg, the Netherlands, Sweden and Denmark with an average 0.8 per cent of GNI. Italy and Portugal contribute an average 0.25 per cent of GNI. The 'Old 15' are expected to raise their contribution to at least 0.7 per cent by 2010, the new member states to 0.33 per cent.

In 2006, the EU provided election support in such countries and territories as the Democratic Republic of Congo, Haiti, the West Bank and Gaza, and Bolivia, supported the Aceh peace agreement, helped countries to fight avian flu, continued its 15-year-old support to Chernobyl, was involved in the ACP Peace Facility, continued its support of the African Union (the EU was among the first to back the AU) and signed an association agreement with the Andean Community.

In terms of rehabilitation and sustainable development initiatives, the EU has helped provide 24 million people with clean water, spent €260 million annually fighting AIDS, malaria and tuberculosis, contracted all of its tsunami reconstruction pledges and 80 per cent of all Afghanistan commitments, besides helping in Iraqi reconstruction and the Lebanon recovery efforts.

To reach its objective of providing 'better' aid, the EU now has 10 external aid policies or 'instruments', streamlined from 35, has updated its commitments to the MDGs, untying aid and alignment, now has fewer restrictions on types of beneficiaries or initiatives, fewer restrictions on budget support (monitored, direct aid to governments which makes aid more predictable), twinning, debt relief and co-financing, and more democratic scrutiny where programmes for regions are presented to the European Parliament.

Outlining the main challenges for 2007 and beyond, Mr Richelle mentioned the implementation of a collaboration mechanism for small states to 'piggyback' on larger states' infrastructure and more development-friendly measures.

Ultimately, he said, "everybody wants to prove that all they do is related to the MDGs, because that is how their aid contributions will be measured in 2010."

Asked about the risks involved in providing development aid funds, Mr Richelle admitted that "there is no development without risk - eradicating risk is a major task." He explained that the Anti-Fraud Office has about 100 cases open for investigation constantly. Strict controls have often seen the EU seek legal redress through local courts.

Commenting on new, emerging donors like China, India and Brazil, he said they were totally intransparent, making mistakes Europe had learnt from painfully decades ago: "They (emerging donors) often do not interfere in internal affairs like human rights. They provide support to protect their own interests; they bulldoze their way through countries and are not interested in sustainability. But this approach is losing its attractiveness, because these donors often do not sign no maintenance agreements after the completion of projects, for example."

Sadly, the EU's huge strides in development assistance struggle to make the headlines, often competing for column inches with glossier political and controversial issues - despite more journalists accredited to Brussels than Washington. Swamped as they are every day, Brussels correspondents are often forced to kick development down their priority list. But as one put it: "It's a shame. It makes a good story because there is good news there. And now there are more figures and more results available."

A fortnight ago, correspondents had some fun stirring the waters as a controversy raged over Commissioner Michel's candidacy to the Belgian senate. Spokesmen rushed to his defence, arguing that ultimately Commissioners were politicians who were allowed to map out their political future as long as they adhered to the Code of Conduct. Privately, however, Commission officials said few would question Mr Michel's commitment to his portfolio given the remarkable progress made in the field.