EU countries exposed for misleading aid claims

Brussels, 3 April 2005: Ahead of vital talks next week of EU Foreign Ministers on whether the EU will meet its aid targets, NGOs criticized key EU member states including the UK, France and Germany for inflating their aid figures.

NGOs provide evidence that a total of €12.5 billion of headline EU aid in 2005 did not result in additional money for poverty reduction but was spent on debt cancellation, housing refugees and educating foreign students in European universities. In its briefing, the coalition of European organizations and national platforms representing hundreds of NGOs across Europe*, called on EU governments to live up to their promises and called for new rules to ensure that debt cancellation does not come at the expense of new aid for developing countries.

Last year, European governments made an historic commitment to substantially increase their aid for the poorest countries and agreed to reach the UN target of allocating 0.7% of their Gross National Income (GNI) to fight extreme poverty by 2015.

In their briefing, NGOs praise a few countries like Sweden and Luxembourg for their high aid levels and minimal aid inflation.

However, the majority of member states are boosting their headline aid levels by massaging the figures, the briefing warns. France, Germany and the UK look likely to be the governments with the most inflated aid figures in 2005 with respectively €3.50, €2.96 and €2.26 billion spent on debt cancellation, housing refugees in Europe and educating foreign students in European universities.

NGOs also say that Italy is unlikely to meet agreed aid targets and spends even less on aid than some of the much poorer new EU member states. The charge comes on the eve of the OECD’s Development Assistance Committee (DAC) special meeting in Paris, where official aid figures for 2005 will be discussed.

“Some European countries are artificially inflating their aid figures including with items that are not representing new money for poor countries. We are challenging those governments to clean up their aid reporting and meet their targets with genuine new money. What developing countries need is more aid money to save lives and not for donors to save face,” said Hetty Kovach of the European Network on Debt and Development (Eurodad) on behalf of the broader NGO coalition.

Key findings include:

• The UK, France, Germany and Italy together counted a staggering €8.47 billion debt relief for Iraq and Nigeria as part of their Official Development Assistance (ODA).

• Austria, which currently chairs the EU presidency, is likely to have inflated its aid figures by as much as 50% in 2005.

• Italy is set to miss its aid target and the country’s official ODA level is close to new member states like Malta, Slovenia and the Czech Republic.

“The credibility of the EU as a world leader in giving aid to poor countries is at stake. NGOs are watching closely in all countries to hold their governments to their pledges,” said Han Verleyen on behalf of 11.11.11 and the Belgian platform of CONCORD.

While technically permitted under OECD rules, European Union governments’ insistence on accounting for this debt cancellation in their ODA figures contravenes the United Nation’s 2002 agreement in Monterrey. The agreement calls for debt cancellation to be funded additionally to Official Development Assistance (ODA).