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Eurozone austerity hits world’s poor

June 26, 2012

THE flow of aid from Europe to the world’s poorest countries fell by 700m euro in 2011, the first drop for almost a decade as the crisis in the single currency caused 14 member states to cut development assistance.

Figures from the pressure group ONE showed that Europe had failed to meet pledges made at the Gleneagles G8 summit in 2005, and it warned that growing budget austerity had “spilled over into life-saving programmes”.

ONE, a charity supported by the rock stars Bono and Bob Geldof, said the EU was way off track to meet its 2105 deadline for devoting 0.7 per cent of annual output to aid and expressed concern that the commitment would be dropped in the current negotiations to decide spending by Brussels between 2014 and 2020. ONE’s annual report showed that two of the countries worst affected by the sovereign debt crisis — Greece and Spain — slashed their aid budgets by 40 per cent and 30 per cent respectively between 2010 and 2011 as EU financial assistance dropped by 1.5 per cent.

Ireland and Portugal — both of which required bailouts from the EU and the International Monetary Fund  — made only small three per cent reductions in their aid budgets, while Italy posted a 25 per cent increase.

Adrian Lovett, Europe executive director of ONE, said: “Huge cuts in aid from Greece and Spain are not unexpected in this time of turmoil but the poor record almost across the board is worrying.

“Countries such as the Netherlands, the UK and Ireland demonstrate that it is possible through determined leadership and smart choices to protect aid budgets. Their example must be replicated.”

ONE said that the EU had fallen £18bn short of the aid pledge made at Gleneagles and had increased aid to Africa by £5bn rather than the £16bn promised. Despite increases by Italy and Germany, both countries had fallen well short of their targets.

“As European leaders mobilise huge sums to bail out their close neighbours, they must not forget their promises to Africa,” said Lovett. “The deal struck to protect Spain’s banks this month is five times what would be needed to get Europe back on track with its aid promises.

“While real progress has been made in Africa in recent years, the fact remains millions of people still rely on life-saving programmes funded by smart aid”. ONE’s analysis showed that the UK remained on course to meet its 2013 target for increasing aid to 0.7 per cent of national output. “David Cameron deserves real credit for his firm promise to reach the 0.7 per cent target next year,” Lovett said. “It is vital that he uses his upcoming G8 presidency (in 2013) and negotiations over the next European budget to ensure all donors keep their promises.”

The secretary of state for international development, Andrew Mitchell, said: “Countless lives will be put at risk if rich countries start to shirk their responsibilities to the poorest. Cutting aid is short-sighted and only serves to damage our own national interests as well as the lives of the very poorest.

Europe’s leaders are currently haggling over proposals for a one trillion euro budget for 2014-2020. — The Guardian, London