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2nd Jul 2022

Europe entering age of 'aid austerity'

The effects of the financial crisis in the EU has resulted in many of the Union's richest member states sharply cutting back aid to developing countries.

Figures released Wednesday (4 April) by the OECD, a Paris-based thinktank, show that debt-ridden Greece - the recipient of two international bailouts - slashed its foreign aid by 39.3 percent in 2011.

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  • The EU is way off-track to meet a 2015 goal on development aid (Photo: Notat)

Spain, now in the midst of an unpredicted recession and under EU pressure to sharply reduce its budget deficit, made a 32.7 percent cut last year.

Austria (-14.3%) and Belgium (-13.3%) also made significant cuts. Of the 15 richer EU member state that are part of the OECD's development assistance committee, only three - Germany, Sweden and Italy - increased their donations to poorer countries last year. Italy is on record for a massive 33 percent increase. But this is mostly due to debt forgiveness and increased refugees coming to the country.

By contrast, the six eastern, and poorer, EU member states that are members of the Organisation for Economic Cooperation and Development all increased their foreign aid in 2011.

In total, aid given by EU countries fell to 0.42 percent of gross national income in 2011, from 0.44 percent the previous year.

The EU decrease is part of a wider trend as countries feel the effects of the global recession, with overall international donations decreasing for the first time in 14 years.

Development agencies have strongly criticised decisions to cut foreign aid, saying the moves were often made for political expediency rather than out of necessity.

“European countries are cutting aid faster than their economies are shrinking. We could see Europe entering an age of aid austerity, pulling back from supporting millions of poor people in developing countries." said Olivier Consolo, Director of Concord, the European Confederation of Relief and Development NGOs.

“The sweeping cuts to European development aid are inexcusable. This means the world’s poorest people are being made to pay the price of austerity whilst the bank bailouts continue," said Catherine Olier from Oxfam.

The NGO noted that the cuts means that the EU is "further off-track to meet its promise to give 0.7 percent of national income by 2015 to the poorest" having already missed a 2010 target of providing 0.51 percent.

It singled out Italy and Austria as countries that need to do more as they currently only give a "tiny proportion" of their incomes.

The US is the world's biggest donor followed by Germany, the United Kingdom, France and Japan. OECD general secretary Angel Gurría said the aid cuts were a cause for "great concern."

"Aid is only a fraction of total flows to low income countries, but these hard economic times also mean lower investment and lower exports. I commend the countries that are keeping their commitments in spite of tough fiscal consolidation plans. They show that the crisis should not be used as an excuse to reduce development cooperation contributions."

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MEPs want the EU to keep a closer eye on the money it spends on joint EU/UN development projects after major shortcomings were identified in control and efficiency.

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