Oxfam's EU Advocacy office in Brussels

By Natalia Alonso, Oxfam’s EU Head of Office

Bwalia 'Bottom' Hospital in Lilongwe by Abbie Trayler-Smith

The latest figures from the OECD seem promising but hide an uncomfortable truth. Donors have collectively increased their development aid spending, but most of Europe’s wealthiest governments still fail to meet promises designed to alleviate global poverty and slash economic inequality.

Overall, the EU-19 contribution to overseas aid has increased a little and some countries like the UK and Sweden have increased their contributions. However, a closer look at some of Europe’s wealthiest countries proves worrying. Key donors like France (-9.8%), Netherlands (-6.2%), Belgium (-6.1%) and Portugal (-20.4%) have slashed aid and spurned their own development pledges.

It is this slowdown by key countries which has led to Western Europe performing slightly worse than the global trend. The EU-19 delivered €51.3 billion or 0.42% of their national income as overseas aid in 2013, which reveals a €42 billion funding gap to meet their 0.7% target by 2015. This long-standing commitment lies at the heart of the UN flagship Millennium Development Goals (MDG) set to expire next year.

Slashing aid has a real human cost leading to fewer teachers and nurses in the world’s poorest countries. European aid saves lives every year and is irreplaceable.

The irreplaceable nature of aid is seen when we look at the European Commission’s aid spending in 2012. The budget totalled €13 billion, representing an important share of government revenue in poor countries including 23% in Sierra Leone, 22% in Comoros, 19% in Burundi, 18% in Malawi, 13% in Madagascar and 12% in Togo.

It is vital that European countries continue to support robust aid projects, refusing to replace it with alternative methods of finance with the developing world. Unlike aid, other sources of development finance like foreign direct investment or loans are not designed to get people out of poverty. Aid is designated to help poor countries raise their own resources for basic services like health and education by helping strengthen their tax systems.

Against the backdrop of broken aid promises by some of the Europe’s richest countries, innovative ways to raise money for development are absolutely crucial. The 11 EU countries who agreed to implement a financial transaction tax (FTT) this year must spend part of the revenues to help fight poverty and climate change. Europe can also crackdown on tax dodging which drains $950 billion out of poor countries every year.

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