The European Network on Debt and Development (Eurodad) today (Thursday) launches its new report which explores the EU’s practise of working with the private sector to partially fund, as well as benefit from, development programmes in poor countries.
‘A dangerous blend? The EU’s agenda to ‘blend’ public development finance with private finance’, calls for an immediate end to the controversial financing mechanisms until there is a radical improvement in accountability and transparency.
The report, which follows months of research, will be launched at the European Parliament.
The report finds that:
There is a risk that these mechanisms are wasting public money that has been allocated to international development aid – grants that are already under threat from budget cuts.
The report’s author Maria Jose Romero, a policy and advocacy officer at Eurodad, said: “Blending as a concept it not new. What is new is the EU’s conviction that there can be an enormous and unprecedented scale-up in the involvement of private financiers, by using ODA to leverage private finance. In our opinion this is a dangerous trend.”
“This is a totally untested mechanism, as virtually all previous EU experience is in blending aid with other public loans. There is virtually no public information about how the blended loans and grants will be used, and whether they meet the needs of the communities they are supposed to benefit.”
Eurodad is calling for an immediate halt to these practises until there is:
· A radical overhaul of the transparency and accountability of the current blending mechanisms.
· A full and independent review of the effectiveness of existing mechanisms focusing on their development impacts and whether they are a suitable vehicle for ODA.
Ms Romero added: “We need to select appropriate financing mechanisms that serve in the first place the needs and priorities of developing countries. Poverty reduction and development outcomes should be the first concern. Before going forward, we need more clarity about how blending mechanisms work and how they contribute to positive development outcomes. At the moment, the European Commission’s attitude seems to be ‘just trust us’. When it comes to development aid, I am afraid this attitude is not good enough.”
To read the full report please go here.
For interviews and further information please contact:
Julia Ravenscroft – Communications Manager at Eurodad – on +32 2 894 48 54
María José Romero – Policy and Advocacy Officer – on +32 2 894 46 47
Notes to the editor:
Eurodad (the European Network on Debt and Development) is a network of 48 non-governmental organisations from 19 European countries working on issues related to debt, development finance and poverty reduction. Since it was founded in 1989, Eurodad has been pushing for development policies that support pro-poor and democratically-defined sustainable development strategies. Eurodad works on the promotion of responsible finance principles. See Eurodad’s responsible finance charter.