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Europe opens chequebook to revive Ivory Coast economy

12 April 2011, 21:46 CET
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(LUXEMBOURG) - Europe granted Ivory Coast President Alassane Ouatarra a half-a-billion-euro inducement Tuesday to secure economic revival after months of violence leading up to Laurent Gbagbo's capture.

Former colonial power France announced a cash injection of 400 million euros ($580 million), after which European Union development commissioner Andris Piebalgs produced another 180 million.

The aim was to give Ivory Coast citizens "peace, a future, their economy restored" and get life "back to normal," said EU foreign affairs chief Catherine Ashton at a meeting of ministers in Luxembourg.

On both counts, though, money will be used to clear external Ivory Coast debts.

Designed to reboot the violence-wracked west African country's economy, Europe wants to help stabilise the new regime in the world's top cocoa producer, after a four-month political crisis that saw the west African nation slip back towards civil war.

The French aid will allow Ivory Coast to make "overdue payments to international institutions" as well as "finance emergency spending on the population, the city of Abidjan and restarting essential public services," Paris said.

The European Commission's Humanitarian Aid and Civil Protection agency (ECHO) had already provided 30 million euros in aid.

Piebalgs said the fresh 180 million euros from the commission would "clear Ivory Coast debt accumulated vis-a-vis the European Investment Bank" as well as "ensure basic social needs, such as health, water and sanitation, and the agriculture sector."

Already on Friday, the EU rescinded some of the sanctions imposed on the country in an effort to strangle strongman Gbagbo financially and force him out of his bunker.

Following a request from Ouattara last week, the EU lifted sanctions on the ports of Abidjan and San Pedro as well as an oil company and the regulators of the country's vital cocoa and coffee industries.

Coffee and cocoa alone represent some 40 percent of Ivory Coast exports and about one fifth of national income.

"We will review the remaining sanctions in consultation with Ouattara's government and withdraw them as and when it is deemed appropriate," Nicholas Westcott, head of the EU diplomatic service's Africa office, told the EU Parliament's foreign affairs committee on Tuesday.

Other firms hit by sanctions included several banks as well as the national oil company Petroci, the APROCANCI association of rubber producers and SOGEPE electricity utility.

EU governments face ever-increasing demands on EU, especially within the eurozone.

Quite apart from a third debt bailout of a eurozone nation within a year for Portugal, huge sums are already to be mobilised to help north African states Libya, Egypt and Tunisia.

The Ivory Coast occupies a key position in west Africa -- and Europe also wants to help it tackle accelerating inflation, unemployment and banking sector weaknesses, amongst others.

However, there is no blank cheque on offer -- not least with Ouattara's image weakened by accusations of involvement by troops loyal to him during a massacre in Duekoue that saw hundreds of people killed according to Western observers. 

3082nd FOREIGN AFFAIRS Council meeting (provisional version) - Luxembourg, 12 April 2011


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