Oxfam's EU Advocacy office in Brussels

Figures released by the OECD today show that Europe has made widespread cuts to overseas aid in the last year. Indeed, development aid from most EU-15 countries has been slashed, leaving Europe even further off-track to meet its promise to give 0.7 per cent of national income by 2015 to the poorest. In practice these cuts mean that 600 million children in developing countries will not be vaccinated against deadly diseases this year, and 500 million mosquito bed nets that protect poor people against malaria will never make it into the homes of poor people.

Although the economic recession certainly means that Europe must tighten its belt, cutting aid is no way to balance the books. Even small cuts in aid cost lives as people are denied life-saving medicines and clean water. Aid is such a tiny part of European budgets that cutting it has no discernible impact on deficits – it is like cutting your hair to lose weight.

So who is responsible for these massive cuts in aid? Well, the biggest cuts were made by Greece (-39.3%) and Spain (-32.7%), with Austria and Belgium also slashing aid budgets substantially. The picture is even bleaker than these figures show, with Spain having already announced further drastic aid cuts and with the Netherlands, which currently meets the 0.7 per cent target, also debating further cuts. Countries making savage cuts to their aid budgets must consider the human cost of their action and immediately reverse their decisions.

The good news is that Norway, Denmark and Luxemburg continue to meet their pledge to give more than 0.7 per cent of national income to aid, whilst the UK remains committed to meeting the target by 2013. In fact, Germany and Sweden have actually increased their aid budgets. The ability of some countries to meet their commitments or even increase their aid shows that cutting aid is more of a political choice than an economic necessity.

European countries must act now to reverse cuts and deliver on their promises to the world’s poorest. Analysis by Oxfam shows that 2011 saw the first global drop in aid provision in 14 years and that at the current rate of progress, donors will not hit their 0.7 target for another 50 years. In 2011 Europe’s aid stood at 0.45% of national income – meaning that donors failed to reach their 2010 target of providing 0.51% of national income for overseas aid. This represents a European shortfall of €7.7 billion on their 2010 target.

EU leaders have shown that they can find large sums of money to bail out banks but yet, to the exceptions of Denmark, Norway and the UK, most are failing dismally to find much smaller sums to help the world’s poorest people. In light of this the sweeping cuts to European development aid are inexcusable. The world’s poorest people are being made to pay the price of austerity whilst the banks continue to get their bailouts. The World Bank has said that tens of millions of people have been pushed into extreme poverty by the economic crisis – this is not the time to pull support out from under their feet.

European governments have a responsibility to meet their aid commitments and to make the financial sector foot the bill and pay for the damage they have caused in poor countries. A tax on financial transactions would do just that. It offers a real opportunity to raise additional revenues to overseas aid, which are desperately needed. Indeed a financial transaction tax could raise €57 billion every year – money that can go towards helping poor people hit by the economic crisis and left in the lurch by sweeping cuts to European development aid.

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