Less than a week after the London Summit, the European Commission outlines a range of actions which the EU can take now to help developing countries weather the ongoing economic crisis. The Communication adopted today by the Commission looks at how Europe can support developing countries in coping with the crisis.
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– 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.
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 “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.
. Working together, the 27 Member States and the Commission can make real efficiency gains, making every aid Eurocount 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.
The Communication will be available online at the site below with four accompanying working documents:
“Financing for Development – Where does the EU go from Doha?”
“2009 Aid for Trade Monitoring Report”
“Aid Effectiveness after Accra Where does the EU stand?”
“Millennium Development Goals Impact of the financial crisis on developing countries”
