EU nations not ready to resume aid to Nicaragua: sources

(BRUSSELS) - There has not been enough democratic progress in Nicaragua for the EU to resume direct aid to the government, diplomatic sources said Tuesday, dashing hopes in Managua of a swift resumption.

There was broad agreement that the Nicaraguan government "still needs to make major steps" on human rights, democracy and the rule of law before the money can start flowing again, the sources said after representatives of the 27 European Union nations met to discuss the issue.

The European Union is a major aid donor to Nicaragua but it suspended some 60 million dollars, from a total of 100 million dollars, of aid after controversial municipal elections there last November.

The rest of the EU's suspended budgetary aid has been handed over to NGOs or specific programmes, for example in education, where every euro must be accounted for.

Stefano Sannino, the European Commission's top external relations official for Latin America, is due to fly to Managua at the end of the week to evaluate the political situation.

The ruling Sandinista party of President Daniel Ortega won most of the mayoral elections last November, amid allegations of widespread fraud.

Since then the EU has tried to pressure Ortega to improve the electoral system and respect human rights ahead of a presidential election in 2011.

Ortega announced in July that he would seek a referendum to change the constitution to allow him to seek re-election.