European countries have been heavily hit by the ongoing financial and economic crisis. As a result of the grim global economic situation, some donors have reduced their development aid budgets with the result that the current crisis has widened the gap between ODA commitments and delivery. Despite the reaffirmation of the Monterrey Consensus at the 2008 Doha Conference on Financing for Development and the renewed commitments by the EU countries to comply with the target of 0.51% by 2010 (EU average 0.56%) and 0.7% by 2015, budgetary pressure lead some countries to decrease their ODA plans.

Moreover, currency movements have also affected aid volumes and, to make matters worse, economic contraction has reduced the dollar value of commitments, which are expressed as a percentage of national income (ODA%GNI).

In this gloomy situation there are no excuses for not addressing the aid effectiveness agenda and trade distorting subsidies. Fragmentation of aid and donor congestion have led to duplication of efforts and high transaction costs; at the same time, the existing EU trade policies undermine the impact of development cooperation.

The UN Millennium Campaign in Europe works towards keeping the MDGs high on the agenda of European governments. Our three main policy priorities are:

INCREASE AID
In 2005, EU governments committed to spend 0.51% of their national income as Official Development Assistance (ODA) by 2010 and 0.7% by 2015. As many countries are underperforming, we ask them to:

• Establish a binding timetable with incremental annual growth rates clearly showing;
• Agree to a new collective interim target of 0.63% minimum by 2012;
• Ensure that any resources from innovative financing mechanisms and those to be used to fight climate change will be additional to ODA .

Not only must aid levels be increased, but the quality of assistance must also be improved in order to achieve the MDGs. In both the “Paris Declaration” and the “Accra Agenda for Action” (AAA), donor countries have agreed to reform, simplify and harmonize the way they deliver aid; the EU Member States have also agreed to a division of labour among each other. In real terms, implementation of these commitments could in fact increase the value of aid. In particular we ask them to:

• Ensure unification of procedures (e.g. public financial management, accounting, auditing, procurement, results frameworks and monitoring);
• Ensure division of labour by focusing bilateral assistance on fewer sectors and fewer partner countries - as agreed in the EU Code of Conduct - by 2011;
• Agree on a binding timetable and measurable indicators to monitor progress.

It is crucial that the Millennium Development Goals form the core of a reformed EU trade and agriculture policy, which should help - not hinder - progress towards achieving the Goals. To this end, we ask European donors to:

• Reform the EU Common Agricultural Policy so it no longer prevents poor producers from lifting themselves out of poverty;
• Increase the export opportunities of developing countries through a simplified and expanded “Everything But Arms” initiative;
• Lead the process for a successful and pro-poor conclusion of the Doha trade negotiations.

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