eu aid - genuine leadership or misleading figures?: an independent analysis of european governments'...

8/7/2019 EU Aid - Genuine Leadership or Misleading Figures?: An independent analysis of European governments' aid levels

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Joint European NGO Repor t April 2006

EU aid:genuine leadershipor misleading figures?

An independent analysis of European Governments aid levels


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About this report

This report has been produced by anunprecedented broad collaboration ofEuropean NGOs. Contributions were receivedfrom all the major European development

NGO networks and from NGOs and NGOplatforms in all 25 EU countries. A list oforganisations formally endorsing the report isavailable at the end.

The report is available at: www.eurodad.orgFor more information send your query to:[email protected]

AcknowledgementsThis report has been written by Hetty Kovachand Alex Wilks at the European Network on

Debt and Development (Eurodad).

Eurodad has been assisted by a SteeringGroup whose members are: Han Verleyen(11.11.11), Romilly Greenhill (ActionAid

International), Iacopo Viciani (ActionAidItaly), Dragan Nastic (BOND), Katia Herrgott(Coordination Sud), Florent Sebban(Eurostep), Michael Obrovsky (FSE) andLuis Morago (Oxfam International).

European aid-watching initiativeThis initiative contributes to the Global Callto Action against Poverty mobilisation. It ispart of a broader process of monitoring andadvocating on European aid being undertakenby a range of organisations and networksunder the umbrella of CONCORD, theEuropean confederation of development andrelief NGOs. This includes a seminar in earlyApril 2006 during which European NGOsdiscussed further joint advocacy activities onEuropean aid.

More information:[email protected]

2 EU aid: genuine leadership or misleading figures?

Contents

PART ONE EU aid: genuine leadership or misleading figures? 3 Flattering official numbers 4Where countries really stand: behind the official figures 6

Change the aid reporting rules 9 Conclusions and demands 11

PART TWO: COUNTRY PROFILES 12Austria 13Belgium 14Denmark 15Finland 16France 17Germany 18Greece 19Ireland 20Italy 21Luxembourg 22The Netherlands 23

Portugal 24Spain 25Sweden 26United Kingdom 27NEW MEMBER STATESCyprus 28Czech Republic 28Estonia 29Hungary 29Latvia 30Lithuania 30Malta 31Poland 31Slovakia 32Slovenia 32

European Commission 33Report signatories 34Endnotes 35


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EU aid: genuineleadership ormisleading figures?

European Governments provide over half of theworlds development aid. In internationaldevelopment negotiations over the last fiveyears they have provided crucial internationalleadership. In 2005 they pledged furtherincreases to aid levels in order to help fightworld poverty. If these pledges are honoured,Europe will provide at least $38 billion more aida year from 2010 onwards.

Increases in high quality aid are vital for thefight against poverty. Providing more aidwould enable millions of people in desperatepoverty to get access to health, education andproductive opportunities.

In 2002 European Governments set themselvesa collective target of providing 0.39% of theirgross national income (GNI) for OfficialDevelopment Assistance (ODA) by 2006 andindividual minimum targets for each country of0.33% of ODA/GNI by 2006. This commitmentwas renewed and expanded in 2005, followingcivil society campaigning, with EuropeanGovernments agreeing to contribute 0.51%ODA/GNI by 2010.

New official figures released by theOrganisation for Economic Cooperation andDevelopment (OECD) in April 2006 and theEuropean Commission in March 2006 showthat European Member States are fulfillingtheir promises and are actually ahead of theircollective target and doing better than expected.

However, there is no room for complacency.

This briefing shows that, according to ourcalculations 13.5 billion or almost one

third of reported European ODA in 2005 didnot provide any new aid for developingcountries. This vast amount of apparent aidspending was in fact money for debtcancellation and for foreign student costs andrefugees in donor countries.

Official debt data reveals that more than 9billion of EU aid in 2005 was spent on thecancellation of two countries debt: Iraq andNigeria. Iraqi and Nigerian debt is largelyexport credit debt. It was issued primarily as ameans of subsiding European companies

operating in developing countries and neverhad any development purpose. While cancellationof this debt is vital, the resources released for

poverty reduction will be far smaller than theheadline figures suggest. European UnionGovernments insistence on accounting for thiscancellation in their official aid figures alsocontravenes the United Nations Monterreyagreement, which calls for debt cancellation to be

funded additionally to Official DevelopmentAssistance.

In addition, assuming that in 2005 Europeancountries continued to spend similar levels of theirODA on these items as in the previous five years, afurther 840 million will have been spent onhousing refugees within European countries, and910 million of EU aid on educating foreignstudents within European countries.

While spending on foreign students andrefugees in Europe is important, these are not

expenses which the public rightfully expects tobe described as development assistance. This isbecause they provide no new resources fordeveloping countries and are not tied todevelopment objectives of improving thewelfare and human security of the poor.

If these items are removed from headline aidfigures, as the NGOs from across Europe whohave combined forces to produce this analysisbelieve they should be, then Europe has still along way to go in its fight against worldpoverty.

This report calls for a clean up in aidreporting to ensure that the only aid that iscounted is aid that saves lives and not simplythat which saves face.

Current aid reporting rules are set by theOrganisation for Economic Cooperation andDevelopment. The OECD allows EuropeanGovernments to regularly include spending ondebt relief as aid and to count spending onrefugees and foreign students in their owncountries as ODA. This must be changed

immediately in order to prevent Governmentsfrom misleadingly inflating aid figures. Thecredibility of Europe is at stake.

EU aid: genuine leadership or misleading figures? 3

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Flattering officialnumbersThe latest figures released by the Organisationfor Economic Cooperation and Developmentand the European Commission show thatEuropean Member States spent nearly45billion on Official Development Assistance in2005. This means that European MemberStates have already reached their collective EUtarget of 0.39% of ODA/GNI a year earlier thanthe target date they had set themselves in 2002.Most EU countries are also able to report thatthey have reached the minimum target forindividual member countries of 0.33%.

The collective European aid average is pulledup by a minority of well-performing EuropeanUnion Governments Sweden, Luxembourg,the Netherlands and Denmark who have allbeen spending at or above the United Nationsaid target of 0.7% ODA/GNI for some years.

Another seven EU countries have recordedthat in 2005 they have already hit, or are justabove, the minimum EU 2006 aid target.These are France, Austria, Belgium, Ireland,Finland, Germany and the United Kingdom.


0.92

0.87

0.82 0.81

0.53 0.52

0.48 0 .47 0 .4 7

0.41

0.35

0.29 0 .2 9

0.240.21

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Sweden

Luxembou

rg

Netherland

s

Denma

rk

Belgiu

m

Austria

UnitedKingdo

m

Finland

France

Ireland

German

y

Ita

ly

Spain

Greece

Portug

a l

2005 Official headline aid figures

THE OFFICIAL PICTURE: ODA as a Percentage of GNIfor the EU 15 Member States, 2005

Why more aid?More aid is badly needed. Between 1.4 and 1.9 billion people worldwide live in poverty. Thispoverty results in needless deaths and low quality of life. For example about 500,000 womenworldwide die each year from complications arising from pregnancy and childbirth and in

2002 alone 3.1 million people died of HIV/AIDS.More aid can make a real difference to peoples lives. Since 1970, aid has contributed to thedoubling of school enrolments and the halving of child mortality. A further aid increasecould make a massive difference in the level of investment in anti-poverty interventions. Forexample, US$ 800 million per year in aid would enable Vietnam to reach the MillenniumDevelopment Goals (MDGs) lifting millions of its citizens out of poverty and enabling themto have access to clean water and health.

A greater volume of aid is important, but not sufficient. Aid allocation and administrationalso need dramatic improvements so that more spending is predictable and poverty-focussed. Developing country Governments need to take steps to meet their internationalcommitments and enable their citizens to be involved in determining policies and

monitoring spending. Aid increases must also go hand in hand with more policy coherencein trade, agriculture and financial policies.

Figure 1

Source: OECD (2006)

5

6

7

8

Box 1.


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At the bottom of the official European aidrankings come Portugal, Spain, Greece andItaly. All are well below the EU 2006minimum target and have a long way to go inorder to reach it. Italy, one of the EUs largest

economies, stood at only 0.29% in 2005, whilePortugal the worst performer in the EU15 stood at only 0.21%

New Member StatesThe ten countries which joined the EuropeanUnion in 2004 (new Member States) arerelative newcomers to aid spending but haverapidly increased their aid levels in recentyears.

Malta posts by far the highest figure, alreadyabove the new Member State EU target for2010 of 0.17 ODA/GNI. All the othercountries are saying they intend to reach this

target. However Estonia, Latvia, Lithuania andCyprus are currently far below and it willremain a major challenge for them to increasespending rapidly enough to meet the target.


Figure 1

0.18

0.12

0.11

0.09 0.090.09

0.06 0.06 0.06

0.04

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

Mal ta Slovenia Czech

Republic

Poland Slovak

Republic

Hungary Eston ia La tv ia L ithuan ia Cyprus

2005 Official headline aid figures

THE OFFICIAL PICTURE: ODA as Percentage of GNIfor the EU New Member States, 2005

Figure 2

Source: EuropeanCommission (2006) 9


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Where countries reallystand: behind theofficial figures

On the surface, the official picture for mostcountries appears positive. However, there is noroom for complacency.

According to our calculations, based entirely onofficial figures, 13.5 billion, or nearly one thirdof reported European Official DevelopmentAssistance in 2005 will not provide any new aidfor developing countries. This is because allEuropean Governments routinely includespending on debt cancellation and on housingrefugees and educating foreign students in theirown countries in their ODA statistics. TheEuropean NGOs which contributed to thisreport believe that these items should not beincluded within ODA statistics. This spending isnot in line with development policy objectivesand often provides minimal new resources fordeveloping countries, resources which are badlyneeded to help lift people out of poverty.

Figure 3 below shows countries headline aidfigures, and also what countries actually gave innew aid in 2005 if debt cancellation, refugeespending and student costs are excluded.

At the top of the list are the 0.7% countries:Luxembourg, Sweden, Denmark andNetherlands. While all but one of these countriesincluded non-aid items in their headline aidstatistics in 2005, all four of them reached the0.7% target even without inflating their aid.

A second group of countries: Ireland, Belgium,and Finland, while not yet at the 0.7% target, havealready surpassed the 2006 minimum EU aidtarget even without inflated aid. Belgium andFinland still continue to count non-aid items aspart of their headline aid statistics, however. All

three countries also need to do more to movetowards the 0.7% target without aid inflation.

The UK and France were amongst the countrieswith the highest levels of aid inflation in 2005,both inflating their aid by more than a third.Once non-aid items are taken out, both countriesare still below the EU minimum target and willhave to work hard to increase aid over the nextyear to reach the threshold. Both also need tostop the practice of heavily inflating theirheadline aid.

Worryingly, there are six countries at the bottomof the list which are highly unlikely to reach theminimum EU target once inflated aid isdiscounted: Austria, Germany, Italy, Spain,Greece and Portugal. Austria, which currentlychairs the EU presidency, is guilty of inflating itsheadline aid by more than 50%, while actual aidis a woeful 0.20% of GNI. Germany, one of theEUs largest donors and host to the 2007 G8summit, inflated its aid by more than 40% in2005 and has an actual aid level of only 0.20% ofGNI, while Italys actual aid effort is a mere 0.19%without aid inflation. Unless all these countries

sharply increase their aid over the next year, theyare likely to face serious embarrassment when itbecomes clear that they can only meet their aidtargets through aid inflation and doublecounting.


gure

0.87 0.86

0.75 0.73

0.41 0.40 0.38

0.310.28

0 .2 4 0 .2 40.20 0 .2 0 0 .2 0 0.19

0.00

0.06

0.06 0.09

0.00

0.13

0.19

0.05 0.15

0.01

0.32

0.09

0.00

0.17

0.10

0.00

0.25

0.50

0.75

1.00

Luxe

mbourg(1)

Swede

n(2)

Denm

ark(4)

Netherla

nds(3)

Ireland

(5)

Belgium(6

)

Finland(7) *

Unite

dKing

dom(1

0)*

France

(11)*

Spain(12)

Gre

ece(9)

German

y(14)*

Portug

al(8

)

Austria(

13)

Italy(15 )*

AidaspercentageofGrossNationalInco

m

e Total inflated aid

ODA net of inflated aid

EU 15 Official aid statistics showing inflated aid 2005

Figure 3

Source: Eurodadcalculations based on

OECD statistics10


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The official rules for determining what countsas Official Development Assistance are set bythe Organisation for Economic CooperationDevelopment. This international organisationrepresents aid-giving countries only andallows them to count items which the public

would never imagine could be included inforeign aid calculations.

For this report we have focused on three keyitems included to boost official headline aidfigures. These are debt relief, imputed foreignstudent costs and immigration/domesticrefugee costs. The NGOs from across Europewhich have combined forces to produce thisanalysis believe that these items should not becounted in official aid statistics, given thatthey do not produce new aid for developingcountries, and often fail to transfer any

resources at all for poverty reduction.Moreover these areas are still only a part ofthe problem when it comes to ensuring thataid goes to reduce poverty. Even aid that doesactually reach poor countries is often poorlyallocated, of low quality, and badly reported(see box 3 on page 10).

This report shows that many Europeancountries are massaging their aid figures in away that can mislead the public. What isneeded is a substantial increase in the amountof genuine aid they provide in order to

translate their promises into real differencesin the lives of poor people.

The following section provides an explanationof why European NGOs believe these itemsshould not be counted as aid, and a more in-depth look at just how much EU aid in 2005

is likely to have been spent on these items.New Member States aid inflation data isincomplete and as a result new Member Statesare dealt with separately at the end of thissection.

Aid inflation is not a small matter.

Debt: According to our calculations basedentirely on OECD statistics 11.8 billion ofEU official headline aid in 2005 was spent ondebt cancellation alone. 9.2 billion of thiswas spent on the cancellation of twocountries debt: Iraq and Nigeria.

Iraqi and Nigerian debt is largely export creditdebt, resulting from credits issued primarily asa means of subsiding European companies,rather than reducing poverty. Furthermore in

the case of Iraq, the rationale for cancellingthese debts has more to do with geopoliticsthan poverty reduction. These transactionsshould not be allowed to count towardscountries headline aid figures.

Cancelling such debts while crucial is oftenmore a matter of cleaning up the balancesheets of European agencies and ministries,rather than providing new resources to investin development. As one Danish NGO activistpoints out: "the money is not moving 5000kilometres from Denmark to Africa, but 500

metres from the Ministry of Foreign Affairs tothe Treasury".


Distorting official aid figures:Iraq and Nigeria debt cancellations, 2005 (millions)

Nigeria DebtCancellation on AidBooks in 2005

Iraq DebtCancellation on AidBooks in 2005

Projected % of 2005 ODA spent onIraqi and Nigerian debt cancellation

Austria 0 651 52%

Germany 926 1,613 32%

UK 1,687 985 31%

Italy 426 749 29%

France 1,000 500 19%

Belgium 113 200 20%

Finland 0.7 120 17%

Spain 0 0 9%

Netherlands 159 74 6%

Sweden 0 0 4%

Denmark 0 6 0.3%

Greece 0 0 0%

Ireland 0 0 0%

Luxembourg 0 0 0%

Portugal 0 0 0%

TOTALS 4,312 4896 23%

Table 1

Sources: OECD


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Debt cancellationAll European Governments formally agreed atthe United Nations 2002 Monterrey Financingfor Development summit that debtcancellation though vitally important fordevelopment should be additional to

Official Development Assistance. This wassupported by poverty and debt campaignersacross Europe who argue that as a matter ofjustice it should be creditors, not poor people,who pay for the cost of debt cancellation. Ifdonors are allowed to score their debtcancellation as ODA, then effectively otherpoor countries (who would otherwise bereceiving aid) pay the price rather than thedonors. The European Commission remindedMember States in March 2006 that "theMonterrey Consensus underlines the need to

ensure that resources provided for debt relief

do not detract from ODA resources intendedto be available for developing countries".

Yet this agreed principle, as our evidenceshows, is being contravened by all but oneEuropean country. Only Norway a non-EUcountry fully upholds the principle that debtcancellation should be additional to aid.

Secondly, the vast majority of the debtscurrently being counted as ODA are exportcredit debts which were not intended to servedevelopment purposes. Export credits are

primarily a means of subsidising Europeancompanies operating in developing countries.And, as in the cases of Iraq and Nigeria, manyexport credit loans have been provided duringperiods of military rule, giving littleopportunity for citizens to scrutinise theinvestment or their outcomes.

As many Governments have not been able torepay these debts for several years, innumerous cases debt cancellation does notfree up resources to invest in development andrepresents a belated recognition that the

money will not be repaid. Even when debtcancellation does deliver new resources as

with much of the Highly Indebted PoorCountries debt relief funding for debtcancellation should be additional to aidspending.

Finally, the way EU Governments account fordebt relief ensures they maximise its value.They count the entire stock of debt in the yearthat it is cancelled, even though debt servicepayments would have happened over manyyears.

Refugees in EuropeIn addition, assuming that Europeancountries continued to spend similar levels oftheir ODA on these items as in the previousfive years, we estimate that a further 840

million of EU aid in 2005 was spent on

housing refugees within Europe. Several EUGovernments, most notably Denmark,Sweden and the Netherlands, include the firstyear costs of refugees arriving from developingcountries in the donor countries and all costsassociated with any repatriation back to thedeveloping country. Spending on refugees isof course necessary, but this spending shouldnot be counted as ODA as it never actuallyleaves the donor country.

Foreign studentsSome European Governments also inflatetheir aid figures by including spending oneducating foreign students in their country.Assuming past spending trends, EuropeanGovernments are likely to have accounted for910 million of the EUs ODA in 2005 oneducating foreign students in donor countries.Funding foreign students education inEurope may be worthwhile, but it should notbe counted as development assistance foroverseas countries.

New Member States: lack of dataFor the 10 new Member States in theEuropean Union providing development


Issue Best performers Worst performers

Including debtcancellation

(Norway), All other countries

Including spending onrefugees

Greece, Ireland, Italy,Luxembourg, Portugal, UK

Denmark, France,Netherlands, Sweden,Czech Republic

Including spending onforeign students

Belgium, Denmark, Finland,Greece, Ireland, Italy,Luxembourg, Netherlands,Sweden, UK, Czech Republic

Germany, France, Portugal

Table 2Aid inflation - best

and worst performers

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assistance is relatively new. In many of thecountries there are serious problems ofcoordination and transparency. In the CzechRepublic, for example, responsibility forofficial aid spending is spread across 11ministries. For this reason, amongst others,

access to information on the details ofdevelopment spending is limited, making itdifficult for citizens and NGOs to monitor.The Hungarian development NGO platformreports that different figures on overall aidvolumes are provided by different ministriesin Budapest.

Because of this, few NGOs in new MemberStates are aware of whether or how much officialheadline aid statistics are inflated with spendingthat does not provide new resources. In somecases, however, this practice is clearly occurring.

Maltas aid is deceptively doubled by theinclusion of its spending on refugees in Malta,and Poland includes debt cancellation spendingin its official development assistance totals.

Change the aidreporting rules

Political will is required to increase aidbudgets and to report transparently and

accurately on progress. We are challengingEuropean Governments to resist thetemptation to make misleading claims.Official aid figures should continue to riseand should only show spending which deliversnew resources for poverty reduction indeveloping countries.

There are dangers that the problem ofmisleading aid reporting could get worse, notbetter. One reason is that further major debtcancellations for Iraq and Nigeria are due in2006, 2007 and 2008. Another is that a

number of Governments including leadingEuropean aid-providers are currentlyarguing that Official Development Assistancereporting rules should be further loosened.They are arguing that spending on securityissues and on climate change mitigationshould be allowed to be counted as part oftheir ODA. Development NGOs consider thatonly interventions which have povertyalleviation as their main objective should beincluded in aid figures.

Since September 2001 there have been moves

by a number of countries to use aid money todirectly or indirectly contribute to the "war onterror", for example by boosting certaincountries military capacities. Support forsecurity should not be taken from the alreadylimited resources allocated to development.Using ODA money to fund military-relatedactivities will result in a diminishing of thefunds allocated to achieve the MillenniumDevelopment Goals. This is a problem in itselfand might deepen inequalities and contributeto further instability.

Climate change is another important issue,but not one which should divert developmentspending. A number of countries propose toclassify their spending under the CleanDevelopment Mechanism as part of theirofficial aid statistics. This mechanism is partof the Kyoto Protocol which aims to assistindustrialised countries to comply with theiremission limits and create a new andadditional incentive for these countries toinvest in clean technologies in developingcountries. Governments which choose tochannel financing through this mechanism

should do so additionally to their OfficialDevelopment Assistance.


What is theOECD DAC?The Organisation for EconomicCooperation and Development is an

inter-Governmental organisation.Established in 1961 and coined therich mans club, the OECD currentlyhas thirty of the richest countries inthe world as its members.Membership to the OECD is byinvitation only and is conditional on acountrys commitment to a marketeconomy and a pluralistic democracy.

The organisation develops policyrecommendations and rules for itsmember Governments on matters as

diverse as trade liberalisation, taxpolicies, health, education andOfficial Development Assistance. TheOECD Development AssistanceCommittee (DAC) currently sets therules for defining what Governmentscan count as Official DevelopmentAssistance. See: www.oecd.org/dac/

Box 2.


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Development NGOs will work to ensure thattheir Governments take a firm stand on thisissue in negotiations before and at the OECDmeeting on aid accounting rules in 2007. Therules for accounting Official DevelopmentAssistance need strengthening, not weakening.


Aid quality and allocation:key additional issuesThis report focuses on some vital issues that must be resolved to improve public confidencethat Governments are meeting aid commitments. There are, however, many other problemswhich frequently stop aid resources reaching those who need it most. Among theseimportant issues which civil society groups in the South and North are continuing tomonitor and campaign on are:

Tied aid. Forcing recipient Governments to buy goods and services from the aid-

providing country raises costs by between 15 and 40 per cent. Only the United Kingdom,Ireland and Norway abide by a 2001 OECD recommendation to fully untie all their aid toleast-developed countries (LDCs). Greece, Austria and Spain have extremely highproportions of aid tied. Finland, Italy and Luxembourg fail to report their tied aid figures,presumably because the figures are so bad. In 2001, the last time Italy reported its tied aid,for example, 92% of its ODA to LDCs was tied.

Ineffective technical assistance. In 2004, European Governments spent 8 billion almost one fifth of the total aid spend on training and research in developing countries.Yet as the OECD has recently acknowledged, technical assistance has been criticised forfrequently being too costly, inappropriate to recipients needs, and for fostering dependency.

Politically-motivated aid allocation. Aid has often been targeted not to countries

that need it most but to Governments which are geo-politically important. Countries thathave seen their aid volumes nearly treble over the last decade include Afghanistan,Colombia, Iraq, Jordan and Pakistan, for example. Some 68% of total EU aid is currentlyspent in low-income countries. However Greece only allocates 29% of its aid to low-incomecountries, Austria 57% and the European Commission 55% .

Conditionality. In exchange for aid finance bilateral and multilateral agencies imposea large number of policy conditions, up to 100 in some cases. This is administrativelyburdensome for developing countries to implement and distorts national policy-makingprocesses. Progress on implementing official pledges to reduce conditions has been veryslow. The UK Government is the only EU Government with a policy to limit economicpolicy conditions such as services privatisation and trade liberalisation.

Un-coordinated aid. Overstretched civil servants in aid dependent countries arerequired to meet a raft of disbursement, procurement, reporting, monitoring and auditingrequirements from multiple agencies, diverting scarce time and resources. A typical AfricanGovernment submits 10,000 quarterly donor reports each year and hosts more than 1,000donor missions. In 2005, EU Governments signed up to targets aiming to reduce theadministrative burden of their aid delivery, but progress remains well below what ispossible.

Predictability: Only 70% of pledged ODA is actually delivered. ODA flows are highlyvolatile: four times more volatile on average, than recipient countries GDP. Donors needto work towards ensuring far greater stability of aid flows in the near future, improvingdisbursements and procedures so that recipient Governments can increase their budgetsand spending predictably.

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Box 3.


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Conclusions anddemands

European Governments have taken a vitalleadership role in international diplomacy on

development assistance in recent years. Theyprovide a very substantial amount of theworlds development assistance, and theamount is rising. However there is no room forEuropean Governments to rest on their laurels.

The harsh reality is that European countries asa whole are a long way off from meeting theiraid pledges. The millions of people whocampaigned for an end to global poverty in2005 wanted action, not just announcements,and have made their own pledges to continueto watch and pressure their Governments until

they deliver on their promises.

This report calls for:A. Genuine increases in European aidEuropean Governments must increase theirODA so that they reach their minimum andaverage commitments for 2006, 2010 and 2015without distorting the figures. This means theyshould not inflate their headline aid figures byincluding items such as debt relief, refugeesarriving in Europe or foreign students educatedin Europe.

B. Clear year-on-year timetablesto reach 2010 targetsAll European Governments must develop theirown clear timetable for reaching the 2010European targets. Italy, Austria, Portugal,Spain, Greece and Germany still need toprovide details on when they will meet theirpledges. New Member States also need toproduce clear timetables for reaching their owntargets.

C. Tighten official aid reporting rules

The rules which determine the criteria forOfficial Development Assistance must bechanged to ensure that Governments cannotmislead their citizens by exaggerating thefigures. The Organisation for EconomicCooperation Developments DevelopmentAssistance Committee (OECD DAC) is theofficial body responsible for setting theinternational rules for official aid statistics.The rich country Governments represented inthe DAC should agree to change the rules forcounting Official Development Assistance sothat countries are no longer able to includeitems which do not provide new resources forpoverty reduction in developing countries.

D. Greater transparencyin aid reportingEuropean Governments must be moretransparent in the way they report their officialaid. Countries routinely fail to provide theircitizens or the OECD with data, making

comparisons across countries hugely difficult.Italy, for example, has failed since 2001 topublish how much of its aid is tied to thepurchase of Italian goods and services. AllGovernments must provide a completebreakdown of their official aid each year andpublish their data much more rapidly.Currently final statistics for each countrysofficial aid statistics are only made public aftera lag of two years, making it difficult forcitizens to track their Governments currentperformance.

E. Enhance the allocationand quality of aidAll European Governments must take steps toimprove the allocation, predictability andquality of their aid. All development assistancefunding must help reduce poverty and meetinternational commitments to the MillenniumDevelopment Goals.


Country OfficialODA TotalInflated Aid Actual Aid OfficialODA/GNI ActualODA/GNI Share ofInflated Aid

2005 () 2005 () 2005 () (%) (%) (%)

Luxembourg 212 0 212 0.87% 0.87% 0%

Sweden 2640 174 2466 0.92% 0.86% 7%

Denmark 1696 129 1566 0.81% 0.75% 8%

Netherlands 4130 477 3653 0.82% 0.73% 12%

Ireland 557 1 556 0.41% 0.41% 0.3%

Belgium 1590 400 1189 0.53% 0.40% 25%

Finland 722 132 590 0.47% 0.38% 18%

United Kingdom 8656 2977 5679 0.48% 0.31% 34%

France 8096 3252 4844 0.47% 0.28% 40%

Spain 2514 435 2078 0.29% 0.24% 17%

Greece 431 2 429 0.24% 0.24% 0.4%

Germany 7981 3412 4569 0.35% 0.20% 43%

Portugal 295 16 279 0.21% 0.20% 5%

Austria 1249 772 477 0.52% 0.20% 62%

Italy 4067 1365 2702 0.29% 0.19% 34%

Total 44,836 13,546 31,291 30%

Table 3

Actual and Inflated Aid by EU country


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PART TWO:

COUNTRY PROFILES

This section provides a detailed breakdown ofofficial aid and aid inflation for each

European country. This data is accompaniedby an assessment from national NGOs of theirGovernments likelihood of meeting the EUminimum aid target of 0.33% ODA/GNI by2006 with genuine aid resources only. Alsoincluded within this section is a page onEuropean Community aid, which addressesother aspects of poor quality aid other thanaid inflation.

Due to a lack of detailed data on new memberstate aid, this report does not provide asdetailed a breakdown of new Member States

aid inflation, however, NGOs do provide anassessment of their Governments likelihoodof meeting the EU aid target of 0.17%ODA/GNI by 2006.

The official aid statistics quoted for 2005 aredrawn from the Organisation for EconomicCooperation and Development preliminaryODA statistics released in April 2006 exceptin the case of the new Member States, wherewe have drawn on data from the EuropeanCommissions recent survey on members aidlevels.

Getting timely access to official aid statisticsis incredibly difficult. Our calculations forhow much official aid will not deliver newresources have been undertaken in two ways.For the debt figures we have used the OECDsofficial preliminary figures for 2005 releasedin April 2006. However, in order to getfigures for how much European ODA wasspent on housing refugees and educatingforeign student in European countries we havetaken each EU countrys spending trend onthese for the last four years (as reported to the

OECD) and then we have projected thisforward for 2005. Therefore, the number is anestimated figure. Finally, it is important tonote that all the figures may be subject tochange, given that the final official ODAfigures will only be released in December2006.

20

21

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AUSTRIAAccording to the latest OECD statisticsAustria has nearly doubled its ODA in 2005. Itwould appear to have moved from a poorperforming European aid donor country to agenerous one, with aid rising from 0.23% ofGNI in 2004 to 0.52% in 2005. This farexceeds the EU minimum aid target for 2006.

However, our calculations indicate that overhalf of Austrias total ODA in 2005 (62%)failed to deliver any new aid resources fordeveloping countries. Once this inflated aid isremoved Austria is significantly below the EUminimum target, registering only 0.20%ODA/GNI.

Austrian NGOs are hugely disappointed attheir Governments performance in 2005 andare deeply concerned that Austria will notmeet the EU minimum target by 2006 in agenuine manner. They call upon theirGovernment to make a real effort this year toensure that they deliver genuine new aidresources to the worlds poor and meet the EUtarget.

According to OECD figures, 725 million or58% of Austrian ODA in 2005 was spent ondebt cancellation, with the largest part of thison cancellation of debt to Iraq. This is not aone-off problem. OECD projections suggestthat further cancellations of Iraqi debt in thecoming years are likely to distort Austriasheadline aid figures in the future.

In addition, if we draw on Austrias official aidtrends over the last four years, 31 millionwas spent on housing refugees in Austria anda further 16 million on educating foreignstudents in Austrian universities.

Austrian NGOs are hugely disappointed thatthe increase in Austrian ODA in 2005 doesnot correspond to an amount of moneyavailable for genuine developmentcooperation.

NGO Prediction : UNLIKELY

Organisations consulted : AGEZ, KOO and Austrian EU - Platform of Non-Governmental Development.

Austrian developmentNGOs demand:

The Austrian Government to establish aspecific timetable to increase AustrianODA in a genuine manner to 0.7% by2010, ahead of the EU timetable.

For all political parties to include a 0.7%commitment for 2010 in their electionprograms and in the Governmentprogramme.

That Austrian ODA becomes morepredictable and better targeted to poorcountries.

401

153

477

772

0

200

400

600

800

1000

1200

1400

M

illionEuros

2004 2005 (preliminary)

Austria's inflated and actual ODA

Total inflated aid ODA net of inflated aid

Will Austria meet its minimumEU aid target by 2006 withoutinflating its aid?

Source: OECD (2006); OECD (2005)


14/35


BELGIUMAccording to the latest OECD statisticsBelgium is significantly above the EUminimum target for 2006, registering 0.53%ODA/GNI as aid in 2005. A quarter of this, or400 million, delivered no new aid resourcesfor developing countries, according to ourcalculations. Once this inflated aid is removedhowever, Belgium still remains comfortablyabove the EU target, registering 0.40%ODA/GNI.

Belgian NGOs are pleased that theirGovernment has met the EU minimum targetahead of schedule with actual aid. However,

they urge their Government to stop inflatingtheir ODA figures immediately. They are alsoconcerned that in the next few years, theirGovernment will continue inflating its figureseven more in order to make the 2010 targets.This is despite the fact that Belgium is among

the few countries that has legally committeditself to a timetable to reach the 0.7% target by2010.

NGO Prediction : YES

Our calculations indicate that 379 million(24%) of Belgian ODA in 2005 was spent ondebt cancellation, with a significant part ofthis going to Iraq and Nigeria. In addition, ifwe draw on Belgiums official aid trends overthe last four years, 21 million of BelgianODA in 2005 was spent on housing refugeeswithin Belgium.

Belgian NGOs fear that their Government willfurther inflate its ODA figures in the comingyears. The Belgian minister for Development

Co-operation is arguing for a loosening ofODA-eligibility criteria at the DAC-level. Ifthis move to include military expenses issuccessful it will enable Belgium to boost itsODA figures even further.

Belgian NGOs call fortheir Government to:

Increase the share of actual aid in theBelgian ODA budget, and decrease theamount of aid that does not result in new

aid flows to developing countries.

Ensure 0.7% of GNI for development co-operation by 2010 and to uphold the aidbudget afterwards.

To implement concrete measures aimingat debt cancellation of all LDCs andconsider these efforts as additional tothe 0.7%.

Pass spending on immigrants to theMinistry of Internal Affairs.

Untie all aid.

Will Belgium meet itsminimum EU aid target by2006 without inflating its aid?

Organisations consulted : CNCD-11.11.11, Coalition of the Flemish North South Movement ACODEV

Belgium's inflated and actual ODA


99 6

19 9

1189

40 0

0

20 0

40 0

60 0

80 0

1000

1200

1400

1600

MillionEuros

2004 2005 (prelim inary)



15/35


DENMARKDenmark is one of only five countries in theworld which has already met the UN aidcommitment of 0.7% ODA/GNI. According tothe latest OECD statistics Denmark is giving0.8% ODA/GNI. Danish NGOs praise theirGovernment for meeting this importantcommitment and being one of the mostgenerous aid givers in Europe.

However, Denmark has set its own nationalcommitment to not go below 0.8% ODA/GNIand NGOs are worried that Denmark may failto meet this commitment, especially given thesteep decline in ODA levels over the lastcouple of years.

129 million (8%) of Danish ODA in 2005delivered no new aid resources for developingcountries, according to our calculations. Oncethis is removed, Denmark is actually below itsown target, registering just 0.75% ODA/GNI.

Danish NGOs urge their Government toensure that they reach 0.8% ODA/GNI in agenuine manner with real resources and notthrough aid inflation.

According to OECD figures,

16 million ofDenmarks official development assistance in2005 was spent on cancelling debt, with mostof this going to Iraq. Danish NGOs supportdebt cancellation, but argue that cancellationsmust come from additional funds. They alsopoint out that a large majority of this debtoriginates in old export credits and is nowbeing channelled back into the state budget,while also being counted as aid. As oneDanish NGO commentator pointed out: "Themoney is not moving 5000 kms fromDenmark to Africa, but 500 meters from theMinistry of Foreign Affairs to the Treasury!"

In addition, if we draw on Denmarks officialaid trends over the last four years, 113million or 7% of its ODA in 2005 was spent onhousing refugees in Denmark, making it theworst European country in terms ofpercentage of ODA used to house refugees.


Danish NGOs demand

that their Government: Go back to allocating 1% of Denmarks

GNI to development assistance.

Make assurances such that assistance isnot diluted and translates into new andadditional resources for povertyeradication and for the MDGs.

Finance debt relief through additionalfunds, probably from the Export CreditFacility itself.

Will Denmark meet itsminimum EU aid target by2006 without inflating its aid?

Denmark's inflated and actual ODA


1581

83

1566

12 9

0

20 0

40 0

60 0

80 0

1000

1200

1400

1600

1800

M

illionEuros


Organisations consulted : Danish EU-NGO Platform and IBIS.



16/35


FINLANDAccording to the latest OECD statistics

Finland is significantly ahead of the EU 2006minimum aid target, registering 0.47%ODA/GNI in 2005. But 132 million (18%) ofthis delivered no new aid resources fordeveloping countries, according to ourcalculations. Once the inflated aid is removed,however, Finland still remains comfortablyabove the EU target, registering 0.38%ODA/GNI.

Finnish NGOs are pleased that theirGovernment has met the EU minimum targetahead of schedule with genuine aid. However,

they urge their Government to stop inflatingtheir ODA figures immediately and note theirconcern that in the next couple of years, theirGovernment will continue to inflate its figureseven more in order to make the 2010 targets.

The 115 Finnish NGOs who took part in the0.7% campaign in Finland in 2005, note thatFinland can easily afford to fulfil its aid

commitments and believe that Finland shouldgenuinely increase its aid.


OECD figures reveal that 121 million, or17%, of Finnish ODA in 2005 was spent oncancelling debt, mostly for Iraq and Nigeria.Debt cancellation is likely to make up asignificant part of Finlands aid budget infuture years and is not just a one off problem.

In addition, if we draw on Finlands officialaid trends over the last four years, 2% ofFinnish ODA or 11million is likely to havebeen spent on housing refugees in Finland in2005.

Though at present Finland does not registeron its aid figures the cost of educating foreignstudents in Finnish universities, it is currentlyconsidering whether to count this on thisODA. Finnish NGOs appeal to theirGovernment to abandon the idea ofsubsidising Finnish universities from aidmoney money for poverty reduction. FinnishNGOs are also concerned that Finnish aidincludes mixed concessional credits used tosupport Finnish exports to poor countries.

Finnish NGOs demand that: Finland follows the example set by its

Nordic neighbours and fulfils itscommitment to raise its ODA to 0.7. Thisshould be through genuine transfers ofreal resources.

Stop paying for refugee related costs andmixed concessional credits from aid funds.

Continues efforts in the field of debt reliefand makes them additional.

On top of this Finnish NGOs demand that:the Finnish Government raises its support tothe least developed countries, especially toEthiopia, Mozambique, Zambia andTanzania, which are among Finlands eightchosen partner countries. Finnish NGOs alsocall on their Government to stop attachingharmful economic policy conditions toFinnish aid, including through multilateralorganisations. Donors must respect the rightof poor people and countries to determinetheir own development model.

Will Finland meet itsminimum EU aid target by2006 without inflating its aid?

Organisations consulted : KEPA

Finland's inflated and actual ODA


53 5

0

59 0

13 2

0

10 0

20 0

30 0

40 0

50 0

60 0

70 0

80 0

MillionEuros




17/35


FRANCEFrance was the first G7 country to adopt a

timetable for its ODA to reach 0.7% of GNI. InMarch 2002, the French president announcedthe adoption of an official timetable forFrench ODA to reach 0.7% of GNI by 2012,with an intermediary target of 0.5% in 2007.

According to the latest OECD statistics Franceis already ahead of the EU 2006 minimum aidtarget and near its commitment to reach 0.5%by 2007, registering 0.47% GNI/ODA in 2005.However, 3.6 billion (40%) of French ODA in2005 delivered no new aid resources fordeveloping countries, according to ourcalculations. Once this inflated aid isremoved, France is below the EU minimumtarget, registering only 0.28% ODA/GNI.

French NGOs hope that France will not onlyreach the minimum EU aid target next yearwith aid that delivers new resources, but comeclose to its 0.5% commitment. They urge theirGovernment to ensure a genuine increase inaid in the coming year and to stop inflatingtheir ODA figures.

OECD figures show that 2.6 billion, or 32%,of French ODA in 2005 was spent oncancelling debt and the large majority of thiswas to Iraq and Nigeria. Debt cancellation islikely to make up a significant part of FrancesODA in future years and is not just a one offproblem.

In addition, if we draw on Frances official aidtrends over the last four years, 305 millionof its ODA in 2005 was spent on housingrefugees in France and a further 373 millionwas spent on educating foreign students inFrench universities. France is one of the worst

European countries for inflating their ODAwith foreign student costs.

Despite Frances poor record, French NGOsdo note that some expenditures of genuineFrench aid to regional initiatives as theEuropean Development Fund and globalinitiatives like the Global Fund to Fight Aids,the UN and the multilateral developmentbanks, are increasing in 2006.

NGO Prediction : LIKELY

French NGOs demandthat their Government:

Calculate debt relief figures on the basis oftheir market value, so that it does notoverestimate their impact on recipientsbudget, and improve the transparency of debtcancellations.

Exclude export credit debt cancellationfrom ODA.

Exclude artificial aid from ODA (mainlystudents costs, housing refugees, expendituresto French Territories).

Adopt a programming law in order tomake real ODA reach 0.7% of GNI by 2010and to improve both predictability and qualityof aid.

Coordination Sud members detaileddemands can be seen in their 2005 report onFrench ODA available at:www.coordinationsud.org

Will France meet its minimumEU aid target by 2006 withoutinflating its aid?

France's inflated and actual ODA


4318

2603

4844

3252

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

M

illion

Euros


Organisations consulted : Coordination Sud.



18/35


GERMANYAccording to the latest OECD figures Germanis currently on track to reach its EU 2006 aidtarget, registering 0.35% ODA/GNI in 2005.However, 3.4 billion (43%) of German ODAin 2005 delivered no new aid resources fordeveloping countries, according to ourcalculations. Once this inflated aid isremoved, not only is Germany significantlybelow the EU minimum target, registering just0.20% ODA/GNI, but the amount of genuineaid it gave has actually decreased since 2004.

German NGOs are hugely disappointed attheir Governments dismal performance in

2005 and are deeply concerned that theirGovernment has actually decreased theamount of genuine aid it gave in 2005. Theycall upon their Government to make a realeffort this year to ensure that they deliversubstantial genuine new resources to theworlds poor in order to meet the EU target.They also demand that Germany immediatelystops inflating its ODA figures.


According to OECD figures, over one third -2.9 billion - of German ODA in 2005 wasspent on cancelling debt, with the largemajority of this to Iraq and Nigeria. Debtcancellation is likely to make up significantpart of Germanys ODA in future years and isnot just a one off problem.

In addition, if we draw on Germanys officialaid trends over the last four years 487million, 6%, of its ODA was spent oneducating foreign students in Germanuniversities, making it the worst EU countryfor inflation on this item. A further 49million of German ODA in 2005 was spent onhousing refugees in Germany.

German NGOs calls on theGerman Federal Government to:

Increase German development assistanceso that it provides genuine new resourcesto developing countries.

Exclude cancellation of non-concessionaldebt from official aid figures.

Introduce innovative financinginstruments.

Raise the effectiveness of Germandevelopment cooperation and co-ordinateit more efficiently on an internationallevel.

Will Germany meet itsminimum EU aid target by2006 without inflating its aid?

For detailed information:www.weltweite-aktion-gegen-armut.de/docs/DSGA-VENRO-positionpaper.pdf

Germany's inflated and actual ODA


5069

1086

4569

3412

0

1000

2000

3000

4000

5000

6000

7000

8000

M

illion

Euros




19/35


GREECEAccording to the latest OECD figures Greeceis currently far below the EU 2006 aid targetof 0.33%, registering only 0.24% ODA/GNI in2005. Only2 million of Greek ODA in 2005did not deliver new aid resources, according toour calculations. This makes Greece one of thebest European countries when it comes to notmisleading the public with aid inflation, butstill a very weak performer when it comes todelivering on its aid increases.

Greek NGOs are disappointed and concernedthat their Government is off-track to meet theEU minimum aid target by 2006 in a genuine

manner. They call upon their Government tomake a real effort this year to ensure that theydeliver substantially more genuine resourcesto the worlds poor in order to meet the EUtarget. They also demand that Greeceimmediately stops inflating its ODA figures.

If we draw on Greeces official aid trends overthe last four years, 2 million of Greek ODAin 2005 was spent on housing refugees inGreece. Greek NGOs call for the GreekGovernment to totally remove thisexpenditure from the ODA budget and

redirect the funds towards poverty reductionand finance support for refugees in Greecefrom the domestic budget.

Greece does not currently account for anycosts for foreign students in Greek universitiesand Greek NGOs praise their Government fornot counting this as ODA.

Greek NGOs also point out that theGovernment needs to do more to ensuresustainable increases and call for a publictimetable to meet the UN 0.7% target. They

also note that there are many other problemswith Greek aid. In particular, they point to thetying of official aid and the very largepercentage which goes to middle incomecountries, which in their opinion seriouslyreduces Greeces effectiveness.


Greek NGOs demand

that their Government:

Commits to a public timetable to increaseits genuine aid in order to meet the EUtarget of 0.51% by 2010 and the UN targetof 0.7% by 2015.

Introduce clear commitments to target themajority of Greek aid to low incomecountries.

Fully untie all Greek aid.

On top of this Greek NGOs call for theGovernment to:

Develop a clear policy rejecting harmfuleconomic policy conditions to aid,including aid through multilateralorganisations, so that recipient countrieshave the policy space to decide on theirown development path.

Introduce a more transparent andaccountable planning and budget process.

Will Greece meet its minimumEU aid target by 2006 withoutinflating its aid?

Greece's inflated and actual ODA


378

2

429

2

0

50

100

150

200

250

300

350

400

450

M

illion

Euros




20/35


IRELAND


According to the latest OECD figures Irelandexceeds the EU 2006 minimum aid target,registering 0.41% ODA/GNI in 2005. Only1.5 million of Irish ODA in 2005 wasinflated aid, according to our calculations,making it one of the best European countrieswhen it comes to not inflating its ODAfigures. Once the inflated aid is removed,Ireland still remains comfortably above theEU target.

Irish NGOs are pleased that their Governmenthas met the EU minimum target ahead ofschedule with genuine aid. However, they urgetheir Government to continue to increasetheir genuine aid levels in line with their ownnational timetable: 0.5% by 2007, 0.6% by 2010and 0.7% by 2012.

If we draw on Irish official aid trends over thelast four years, 700 thousand euros of IrishODA in 2005 went towards expenditurerelated to accommodating refugees in Irelandand a further 700 thousand was spent on

educating foreign students in Ireland.

Irish NGOs are askingtheir Government to:

Keep its promise to spend 0.7% of nationalincome annually on overseas aid by theyear 2012, at the latest.

Introduce legislation to ensure that future

Governments abide by this timetable.

All debt cancellation must be additionalto Irelands contribution toward meetingtheir obligation of spending 0.7% ofnational income on overseas aid.

Further information:www.budget.gov.ie/2006/downloads/StabilityPr

ogramme.pdfwww.irishaid.gov.ie/latest_news.asp?article=678www.dci.gov.ie/latest_news.asp?article=618

Will Ireland meet itsminimum EU aid targetby 2006 without inflatingits aid?

Irelands inflated and actual ODA


493

3

556

1

0

100

200

300

400

500

600

M

illion

Euros




21/35


ITALYAccording to the latest OECD figures Italy

spent only 0.29% ODA/GNI in 2005. This isfar below the EU minimum target for 2006.On top of this, 1.4 billion (34%) of ItalianODA in 2005 delivered no new aid resourcesto developing countries, according to ourcalculations. Once this is removed, Italy iseven further away from the EU minimumtarget, registering a pitiful 0.19% ODA/GNI.This puts Italy as the least generous Europeanaid giver of the EU 15 Member States.

Italian NGOs are hugely disappointed at theirGovernments terrible performance in 2005

and are deeply concerned that Italy will notmeet the EU minimum target next year. Theyurge their Government to make a real effortthis year to ensure that they deliversubstantial genuine new resources to theworlds poor in order to meet the EU target.They also demand that Italy stops inflating itsODA figures.

According to OECD figures just under 1.4billion or 33% of Italian ODA in 2005 wasspent on debt cancellation with the majorityof this going to Iraq and Nigeria. In addition,

if we draw on Italys official aid trends overthe last four years, 13 million of ODA in2005 was spent on housing refugees in Italy.

Italian NGOs also note that a high percentageof Italian aid is tied to Italian goods andservices. Unfortunately the ItalianGovernment does not tell its taxpayers howmuch aid money is diverted to subsidiseItalian businesses; it has refused to publishsuch figures since 2001. Scrutiny of Italiandevelopment spending is also hampered bythe fact that Italian aid spending is carried out

by different ministries which do not releasecombined figures.


Italian NGOs demand thatthe Government elected inApril 2006:

Significantly increases "fresh money" fortransfer to developing countries so as tomeet Italys agreed international aidtargets for 2006 and 2010.

The Italian Government produce acoherent and transparent report onofficial aid spending to enable publicscrutiny of aid allocations.

Will Italy meet its minimum EUaid target by 2006 withoutinflating its aid?

Itlays inflated and actual ODA


1916

95

2702

1365

0

500

1000

1500

2000

2500

3000

3500

4000

4500

M

illion

Euros


Organisations consulted : ActionAid International, Italy.



22/35


LUXEMBOURG


Luxembourg comes out as the bestperforming EU country in terms of aidquantity and limited aid inflation, accordingto our calculations. It is one of only fivecountries in the world which has already metthe UN aid commitment of 0.7% ODA/GNI.According to the OECDs official figures in2005 Luxembourg registered 0.87% ODA/GNI.And not one bit of this is inflated aid.

Luxembourg NGOs are delighted by theirGovernments good performance and call

upon their Government to continue theirexcellent record by reaching their ownnational target of 1% GNI/ODA by 2009 in agenuine manner.

Luxembourg NGOs demand that:

Meets its aid target of 1% by 2009.

Publish a timetable of interim steps to

achieve the target.

Will Luxembourg meet itsminimum EU aid target by2006 without inflating its aid?

Luxembourgs inflated and actual ODA


192

0

212

0

0

50

100

150

200

250

M

illion

Euros




23/35


THENETHERLANDS

The Dutch Government has been spendinghigh amounts on aid for a number of yearsand is one of only five countries in the worldthat has already achieved the UN target of0.7% ODA/GNI. According to the latestOECD figures the Netherlands spent 0.82% ofODA/GNI in 2005. Of this 477 million(12%) of Dutch ODA in 2005 delivered no newaid resources to developing countries,according to our calculations. However, onceremoved, the Netherlands is still one of thetop aid performers in Europe.

Dutch NGOs praise their Government forbeing one of the most generous aid givers inEurope. But they urge their Government tostop inflating its ODA figures immediately.

According to OECD figures 330 million or(8%) of Dutch ODA in 2005 was spent on debtcancellation, with the majority of this going toIraq and Nigeria. Dutch NGOs argue thatexport credit debt write-downs should be paidfrom the Export Credit Facilitys income andnot counted as ODA. In addition, if we drawon the Netherlands official aid trends over

the last four years, 4% or 147 million wasspent on housing refugees in the Netherlandsin 2005, making it one of the worst EuropeanUnion countries for inflating its aid on thisitem.

Dutch NGOs are also concerned that othernon-aid items are increasingly being countedas official development assistance. Theseinclude expenses to prepare projects under theClean Development Mechanism (CDM) of theKyoto Protocol on climate change. Suchexpenses should not be considered aid since

they are expenses of industrialized countriesthat choose to use the CDM facility. Anotherarea of concern is expenses for certainactivities classified as peace & security.


Dutch NGOs demand that the

Dutch Government removefrom its official aid figures:

Export-credit debt cancellations.

Spending on climate change mitigationthrough the Clean DevelopmentMechanism.

Police and military spending.

Will The Netherlands meet itsminimum EU aid target by2006 without inflating its aid?

Netherlands inflated and actual ODA


3166

268

3653

477

0

500

1000

1500

2000

2500

3000

3500

4000

4500

M

illion

Euros


Organisations consulted : Dutch NGO-EU platform



24/35


PORTUGALAccording to the latest OECD figures,Portugal is currently far below the EU 2006aid target of 0.33%, registering 0.21%ODA/GNI in 2005. In addition, 16 million(5%) of its ODA in 2005 delivered no new aidresources to developing countries, accordingto our calculations. Once this is removed,Portugal is significantly below the EU target,registering only 0.20% ODA/GNI.

Portuguese NGOs are hugely disappointed attheir Governments poor performance in 2005and are deeply concerned that Portugal willnot meet the EU minimum aid target. They

urge their Government to make a real effortthis year to ensure that they deliversubstantial genuine new resources to theworlds poor in order to meet the EU target.They also demand that Portugal stopsinflating its ODA figures.

In fact, in 2004, Portugal was one of the mainEU culprits for inflating its ODA with itemswhich failed to deliver new aid resources todeveloping countries. If we look at 2004


Portugals apparent aid spending was inflatedby an amazing 70%. This was the result ofincluding debt cancellation (570 million),student costs (25 million) and a smallamount on housing refugees within Portugal(1 million), according to OECD statistics.

According to OECD figures 2 million or 1%of Portuguese ODA was spent on debtcancellations in 2005. In addition, Portugal,according to provisional figures, spent 13million on educating foreign students in

Portugal.

Portuguese NGOs are concerned about thequantity, quality and effectiveness ofPortuguese development assistance. Theyargue that the current PortugueseGovernments approach to public spendingmakes it unlikely that aid will rise rapidly.They also argue that "the level of publicinformation and awareness on aid levels andpolicies is very limited" and that there isinefficient and ineffective coordinationbetween Government departments.

Portuguese NGOs demandthat their Government:

Raise aid spending in line withinternational commitments.

Focus spending on a coherent basis withsustainable development objectives.

Introduce clearer rules on allocation andevaluation of aid funds.

Will Portugal meet itsminimum EU aid target by2006 without inflating its aid?

Organisations consulted : National development NGO platform

Portugals inflated and actual ODA


250

592

279

16

0

100

200

300

400

500

600

700

800

900

Million

Euros




25/35


SPAINAccording to the latest OECD figures, Spainonly registered 0.29% ODA/GNI in 2005. Thisis below the EU target and makes Spain thethird last donor out of the 15 old members,only better than Greece and Portugal. Inaddition 435 million (17%) of this can beconsidered as inflated aid according to ourcalculations. Once this is removed, Spain issignificantly below the EU target, registeringonly 0.24% ODA/GNI.

Spanish NGOs are aware that their newGovernment is struggling to increase both thequantity and quality of its aid, but the

departure level is extremely low and Spain isstill by 2005 one of the worst performers. TheGovernment has committed to make a realeffort this year through the new 2006 budgetto ensure that they deliver substantial genuinenew resources to the worlds poor in order tomeet the target. They also demand that Spainstops inflating its ODA figures

According to OECD figures 401 million or16% of Spanish ODA in 2005 was spent ondebt cancellation. In addition, if we draw onSpains official aid trends over the last four

years,

15 million of Spanish ODA in 2005was spent on housing refugees in Spain and afurther 20 million on educating foreignstudents within Spanish universities.

Spanish NGOs are calling for the SpanishGovernment to ensure that debt relief fundsare additional to existing aid, including thiscommitment in the new law that is beingdiscussed in parliament on debt relief. Theywelcome the Spanish Governments ownpledge to reach 0.5% by 2008 but urge it to doso by increasing real resources available for

development spending.

Spanish NGOs also note that there are stillmany other challenges regarding the quality ofSpanish aid. About 30% of bilateral aid atpresent is tied to the purchase of Spanishgoods and services. This distorts spending forcommercial gain rather than povertyreduction.


Spanish NGOs demand that

their Government: All political parties commit to a timetable

to reach 0.7% of aid as a proportion ofgross national income.

20% of aid is allocated to essential services.

At least 0.15% of gross national income isallocated to the least developed countries,especially Sub-Saharan African ones.

Will Spain meet its minimumEU aid target by 2006 withoutinflating its aid?

Spains inflated and actual ODA


1777

214

2078

435

0

500

1000

1500

2000

2500

3000

Mi

llion

Euros




26/35


SWEDENThe Government of Sweden has been providinga high level of development assistance for manyyears. It is one of only five countries in theworld which has already reached the UN targetof 0.7%. Swedish NGOs praise theirGovernment for meeting this importantcommitment and being one of the mostgenerous aid givers in Europe.

Sweden has set its own national aid target of1% ODA/GNI by 2006 and Swedish NGOs areconcerned that Sweden should reach thistarget, but through genuine aid resources.

According to the latest OECD statistics Swedenis giving 0.92% ODA/GNI in 2005. 174million (7%) of this did not deliver any new aidresources for developing countries, accordingto our calculations. Once this is removed,Sweden is far away from its own target,registering 0.86% ODA/GNI.

Swedish NGOs urge their Government toensure that they reach 1% ODA/GNI by 2006 ina genuine manner with real resources and notthrough aid inflation. They also call for theSwedish Government to stop inflating its aid.


According to the latest OECD figures, 43million of Swedish ODA in 2005 was spent ondebt cancellations. In addition, if we draw onofficial aid trends for the last four years, afurther 132 million was spent on housingrefugees in Sweden.

Swedish civil societyorganisations call for:

The removal from official aid statistics of

amounts that do not result in increasedresources available for combating povertyin developing countries.

Sweden should not use its aid budget tofinance debt relief.

Untying of all Swedish aid to developingcountries.

An end to the use of economic policyconditions on aid so that recipientcountries have policy space to decide on

their own development models.

The delivery of real development aid thatfocuses on poor peoples needs, has a clearrights-perspective and takes long-termsustainable development as its startingpoint.

Will Sweden meet itsminimum EU aid target by2006 without inflating its aid?

Organisations consulted : Forum Syd, Diakonia, Church of Sweden

Swedens inflated and actual ODA


2061

163

2466

174

0

500

1000

1500

2000

2500

3000

MillionEuros




27/35


UNITEDKINGDOM

According to OECD figures the UnitedKingdom has already exceeded the EUminimum aid target, registering 0.48%GNI/ODA in 2005. However, a third (3billion) of this did not deliver any new aidresources for developing countries, accordingto our calculations. Once this is removed, notonly is the United Kingdom below the EUtarget, spending only 0.31% ODA/GNI, butthe amount of genuine aid it gave has actuallydecreased since 2004.

British NGOs hope that the United Kingdom

will reach the minimum EU aid target nextyear with aid that delivers new resources, butremain concerned, especially with thereduction this year in actual aid levels. Theyurge their Government to ensure a genuineincrease in aid in the coming year in order toensure they meet the EU minimum aid target.They also demand that the UK Governmentstop inflating their ODA figures.

According to OECD figures 2.97 billion, or34%, of UK ODA in 2005 was spent on debtcancellation and most of this went to Iraq and

Nigeria. This is not a one-off problem as,according to our projections, 2 billion ofBritish aid will go on debt cancellations in2006. The UK gives a positive example toother EU countries, however, by not includingany spending on refugees or on foreignstudents in its aid statistics.

UK NGOs congratulate the UK Governmenton setting its own target of 0.7% by 2013, withan interim target of 0.47% in 2007/08. UKNGOs hope that once the huge debt spikes in2005-6 have past, the UK Government will get

back on track to meet these targets in agenuine manner.


UK development

NGOs demand thattheir Government:

Set itself a more ambitious target ofreaching 0.7% in 2010.

Stop counting debt relief as part of itsprogress towards reaching 0.7%. Debtrelief financing should be additional to aidfinancing.

Improve the quality of its aid, by fully

implementing its position on economicconditionality, by reviewing its use oftechnical assistance and encouraging morelocal procurement.

It should also do more to promote mutualaccountability, including throughimplementation of the Paris Declarationon Aid Effectiveness, ensure meaningfuland effective mechanisms for reachingagreed targets to improve aid quality, andthe promotion of human rights and thecountry level.

Will the UK meet its minimumEU aid target by 2006 withoutinflating its aid?

UKs inflated and actual ODA


5805

634

5679

2977

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Mill

ion

Euros


Organisations consulted : British Overseas NGOs for Development (BOND), UK Aid Network (UKAN).



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New EU Member States

CZECHREPUBLICWill the Czech Republic meet its EU2010 minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures, the Czech Government is

spending 0.11% ODA/GNI in 2005. However,12 million of Czech ODA in 2005 willdeliver no new aid resources for developingcountries, according to our calculations.

Czech NGOs are seriously concerned that theCzech Republic will not meet its 2010commitment. This is because the CzechGovernment has announced that its spendingwill remain at 0.11% of GNI for 2004, 2005and 2006. Czech NGOs urge theirGovernment to provide a substantial increasein genuine aid.

According to OECD figures 10 million ofCzech ODA was spent on debt cancellation in2005. In addition, if we draw on official aidtrends for the last four years, 4 million wasspent on housing refugees within the CzechRepublic.

Czech NGOs note additional problems withCzech ODA, highlighting that thecomplicated administrative system of CzechODA has led to a fragmentation ofresponsibilities, with no central development

agency. There are also problems linked to theone-year financing system that complicates allstages of the development project cycle.

State aid administration is currently dividedamong 11 different ministries and it isextremely important to establish a CzechDevelopment Agency as a necessaryprecondition for effective planning andimplementation of ODA projects andprogrammes.

However, on a more positive note, Czech

NGOs praise the Government for theenormous progress it has made in terms oftransparency in its aid delivery. A new ODA

administration system to be introduced in2006 should enhance transparency of projectidentification and formulation and results ofproject monitoring and evaluation.

Czech NGOs note that their greatest overall

demand, however, remains the need for asteady increase in Czech ODA in line with itsEU aid commitments.

Organisations consulted:FoRS - Czech Forum for DevelopmentCooperation, Development Centre of theInstitute of International Relations,People in Need.

CYPRUSWill Cyprus meet its EU 2010minimum aid target of 0.17%?

Prediction : UNLIKELY

According to the European CommissionsMarch 2006 figures Cyprus spent 0.04% ODA/GNI in 2005, making Cyprus the leastgenerous aid giver of all new Member States.Due to a lack of data, it is not possible toreveal how much of this delivered no new aidresources for developing countries.

Cypriot NGOs are extremely concerned thatCyprus will not meet its EU aid target in 2010and consider these numbers very low, giventhe economic context of Cyprus. They urgetheir Government to increase the amount ofgenuine aid they give in the next couple ofyears. They also demand that there is greatertransparency in ODA reporting in Cyprus.

In addition, Cypriot NGOs point out that thetargets set by the Cyprus Government includea focus on the Millennium Development

Goals and especially the poverty reductiongoal, the untying of ODA and a stronginterest in ensuring aid effectiveness.

The demands of Cypriot NGOs include abetter allocation of aid funds, and CypriotNGOs hope a climate of trust can beestablished between development NGOs andthe Government.

Organisations consulted:CARDET, Doctors of the World Cyprus,Cyprus Neuroscience and Technology

Institute.



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ESTONIAWill Estonia meet its EU 2010minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures, the Government ofEstonia spent 0.06% ODA/GNI in 2005. Dueto a lack of data it is not possible to revealhow much of this delivered no new aidresources for developing countries.

Estonian NGOs are concerned that Estoniawill not reach 0.17% ODA/GNI by 2010. Theynote that development cooperation gets very

low priority in the Government and considertheir aid spending rather low in comparisonto that of some of the other new MemberStates. Estonian NGOs urge their Governmentto substantially increase the genuine new aidresources in the coming years; in order forEstonia to meet its EU aid target. Thoughthey note that their Government its takingsome steps to make development assistancemore transparent, they call for still greatertransparency in aid reporting by theirGovernment.

Estonian NGOs are also happy that the debtcancellation finance Estonia contributed tothe Highly Indebted Poor Countries TrustFund was not counted as official developmentassistance in 2005.

Estonian NGOs asktheir Government to:

Keep Estonia's commitment to reach the0.17% by 2010.

Introduce clear commitments to target aidto Least Developed Countries, basic socialservices and the MDGs.

Provide clear figures.

Make more efforts to raise awareness onglobal poverty and inequality.

Organisations consulted:Estonian Roundtable for DevelopmentCooperation (AK).

HUNGARYWill Hungary meet its EU 2010minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures, the HungarianGovernment spent 0.9% ODA/GNI in 2005.Due to a lack of data, it is not possible toreveal how much of this delivered no new aidresources for developing countries.

Hungarian NGOs are very worried thatHungry will not meet its EU aid target in2010, despite substaintial increases in aid over

the last couple of years. This is because theirGovernment recently announced that theHungarian Ministry of Affairs budget will bereduced by two thirds in 2006.

Hungarian NGOs also demand greatertransparency and standardised data from theirGovernment on aid spending. All too oftenthe different Government departmentsresponsible for ODA spending publishdifferent figures.

Hungarian NGOs urge theirGovernment to reach its EUaid commitments.

Organisations consulted:National development NGO platform.



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LATVIAWill Latvia meet its EU 2010minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures the Latvian Governmentspent 0.61% ODA/GNI in 2005. Due to a lackof data it is not possible to reveal how muchof this delivered no new aid resources fordeveloping countries.

Latvian NGOs are extremely concerned thatLatvia will not meet EU minimum aid targetsin 2010 due the very slow pace that official aid

is increasing within Latvia. This is confirmedby the current Governments developmentcooperation financing policy which foreseesreaching only 0.10% GNI by 2010, below thetarget of 0.17%.

Latvian NGOs also demand greatertransparency in Latvian aid spending,highlighting that there is no publicinformation on how much Latvian official aidfigures are inflated by including debt write-downs and spending on education andrefugees.

Latvian NGOs demandthat their Government:

Reach at least 0.17% GNI by 2010.

Introduce transparency for the selection ofaid-funded projects.

Organisations consulted:Latvian NGDO Platform.

LITHUANIAWill Lithuania meet its EU 2010minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures Lithuania spent 0.06%ODA/GNI in 2005. Due to a lack of data, it isnot possible to reveal how much of thisdelivered no new aid resources for developingcountries.

Lithuanian NGOs are extremely concernedthat their Government will not met the EUaid target, noting that the Government lacks

political will. Official aid policy is limited to anarrow circle of specialists. Lithuaniasnational parliament has no plans to discussODA issues.

Lithuanian NGOs urge their Government toincrease aid spending in the next couple ofyears to ensure that Lithuania reaches itstarget. They also call for greater transparencyin ODA implementation, evaluation andaccountability.

Organisations consulted:

Lithuanian NGDO Platform, Institute forSocial Ethics.


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MALTAWill Malta meet its EU 2010minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures the Maltese Governmentspent 0.18% ODA/GNI in 2005, exceeding theEU target for 2010. However, almost half ofthis did not deliver any new aid resources fordeveloping countries, according to MaltaseNGOs. The majority of this was spent onhousing refugees within Malta, though debtcancellation is also counted as ODA. Oncethis is removed, Malta is significantly below

the EU target.

Maltese NGOs are optimistic that Malta willmeet its EU aid targets in a genuine manner,but demand that Malta stops inflating its aidfigures. Maltese NGOs also call for greatertransparency and access to information onMaltase ODA.

Organisations consulted:Koperazzjoni Internazzjonali Malta.

POLANDWill Poland meet its EU 2010minimum aid target of 0.17%?


According to the European CommissionsMarch 2006 figures Poland spent 0.09%ODA/GNI in 2005. Due to a lack of data, it isnot possible to reveal how much of thisdelivered no new aid resources for developingcountries. However, Polish NGOs highlightthat according to their data, a significant partof official aid figures announced by theMinistry of Finance figures was spent on debtrelief; an example is 8.7 million of Ethiopian

debt.

Polish NGOs are seriously concerned that thePolish Government will not reach the EUODA target, despite sharp increases in theiraid over the last couple of years. They urgetheir Government to prove them wrong and toprovide more genuine aid resources in linewith the EU target. They also call for greater

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