Over 1600 European NGOs united under CONCORD, the European NGO Confederation for Relief and Development criticised European governments for seriously inflating their aid figures for a second year in a row. They revealed that close to one third of EU development assistance in 2006 did not deliver any fresh resources for poor countries.

“European governments are relying on large one-off debt cancellations to Iraq and Nigeria to fatten up their figures. This is short-sighted and it gives the impression that they are making more money available for poverty reduction than is really the case. Although some European countries are moving in the right direction, most will not reach the targets they set themselves unless major improvements are made,” said Lucy Hayes from Eurodad, the European Network on Debt and Development. “Breaking aid promises prevents children from going to school and from surviving preventable diseases. Significant increases of genuine aid are needed if Governments are to fulfil their commitments by 2010”

In 2006 nearly 30% of European aid or 13.6 billion euros of reported ODA was inflated. Of this:
 Nearly €11 billion euros reported as ODA was in fact debt cancellation - primarily for Iraq and Nigeria.
 €1.6 billion went on educating foreign students in Europe and
 €1 billion was spent on housing refugees in Europe.

The European Union has only spent 0.30% of its Gross National Income (GNI) on genuine aid in 2006 missing their collective target for 2006 of 0.39%.

Austria and France were the worst culprits for inflating their aid in 2006. More than half of their claimed development assistance did not deliver genuine new resources for poor people.

Governments often announce debt cancellation and aid volumes separately, giving the impression that they are separate amounts of money. Debt cancellation is necessary but should not be counted as ODA. Targets for aid that include debt cancellation do not give a transparent or realistic picture of what most people understand as ‘aid’. Concord is calling for new rules to ensure that debt cancellation does not come at the expense of real increases in aid for developing countries.

“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 national income to fight extreme poverty by 2015” said Ester Asin from Concord. “Yet seven of the EU 15 countries did not make the minimum 2006 target without inflating their aid”.

In mid-May this year, CONCORD will launch an in-depth report analysing issues of quality and quantity of aid from the European Union member states to the developing world.

Note to editors:

 EU 15 countries committed to an interim target to individually spend at least 0.33% of GNI on ODA by 2006. Collectively they agreed to reach 0.39% ODA/GNI by 2006
 Greece (0.16%), Italy (0.2%), Portugal (0.21%) and Spain (0.32%) failed outright to reach this minimum target.
 When inflated aid is subtracted Austria (0.21%), France (0.23%) and Germany (0.23%) also fail to meet this target.

Debt relief issue:

Counting debt relief towards the 0.7% target effectively means that the value of debt relief is being offset by a reduction in the non-debt relief aid that would otherwise be delivered in order to meet the target. Both increasing aid volumes and substantial debt cancellation are required to meet the Millennium Development Goals. In the 2002 Monterrey Consensus donors recognized the importance of ensuring that resources provided for debt relief do not detract from the aid resources intended to be available for developing countries.