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Wednesday, April 8, 2009

A new engagement coming from the European Commission to face the crisis

Following the engagements taken during the G20 summit in London of the last week, the European commission envisages new aids for the ACP countries (Africa, Caraibes and Pacific) in order to face the actual economic crisis.The Communication adopted today by the Commission looks at how Europe can support developing countries in coping with the crisis.

First, keeping our promises - already the largest donor in the world, EU aid rose to €49 billion in 2008, representing 0,40% of GNI. Aid volumes would need to increase to an estimated €69 billion in 2010 to meet the collective promise of 0,56% of EU GNI made at the G8 Gleneagles Summit in 2005. This would release an additional 20 billion EUR. Furthermore, the Commission proposes greater use of development aid to leverage other funds, including through the European Investment Bank - every euro spent on aid should leverage up to five euros of private investment.

Second: Frontload and refocus existing commitments on the most vulnerable. The Commission is frontloading €3 billion, or 72% of its foreseen budget support to African, Pacific and Caribbean nations thereby ensuring that social spending is not forsaken when most needed. An ad hoc "FLEX" instrument will act counter-cyclically to compensate those developing countries worst hit by falling export revenues as world trade contracts. It will be on stream before the end of 2009, directing at least €500 million to allow developing countries to continue social safety net spending. This is in addition to the €1 billion "food facility" adopted prior to the G20, €800 million of which will be made available this year. Overall, frontloading by the European Commission should bring forward €4.3 billion resources to 2009.

Finally, the EU has taken the lead in making existing aid more effective. Working together, the 27 Member States and the Commission can make real efficiency gains, making every aid Euro count and serving as a model for others across the world. First estimates, according to a study commissioned by the European Commission, are that we could free up as much as €7 billion per year by making aid more effective, implementing principles already agreed in 2008.

Source  Aids for the ACP countries

More information  EC press room

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