The EU Council has decided that the Union should fully participate in the joint IMF/World Bank initiative to ease the debt burden of heavily indebted poor countries ('HIPC Debt Initiative'). The Council declared that the European Community participation will be in the form of financial assistance, i.e. loans to ACP countries eligible for HIPC (11 out of the 71 ACPs). This is in order to enable the ACP countries to reduce the current value of their external debt to the EU and meet their debt reimbursement and debt service obligations. During the course of 1998, the European Commission will have to present a report to the European Parliament and Council reviewing the remaining financing needs arising from the Community participation in the initiative.
The Council decision follows the Commission proposal, along these lines, to the Council, and the ACP Finance Ministers' call on the EU to support the Bretton Woods initiative (see last week's PAF - 94).
2. EU TRUST FUND FOR CRISIS HIT ASEM COUNTRIES
Following the pledge by the European Commission and several EU Member
States, to help Asian countries afflicted by the crisis in the region,
at the last Asia-Europe Meeting, (ASEM) in London in April, donors of the
so called ASEM Trust Fund met this week to discuss the organisation of
projects and the contributions of donors. The total budget of the Fund
in the form of donations will amount to 41 million ECU and will be administered
by the World Bank.
The Fund which became operational on 29 June will run till 31 December
2001. It is supposed to contribute towards helping seven ASEM countries
- China, Indonesia, Malaysia, the Philippines, South Korea, Thailand and
Vietnam - come out of the financial crisis by: 1) establishing a network
of European and Asian experts who will provide advisory services for reforming
the financial and banking sectors; and 2) contributing to social measures
such as reform of the social security system for workers to provide direct
aid to victims of the crisis.
3. EU CONCERNS OVER ELECTIONS IN TOGO COULD LEAD TO SUSPENSION OF LOME CONVENTION FOR TOGO.
The European Commission has advised the Council to begin consultations with the Togolese Government in order to examine the political situation following Togo's presidential elections in June. The Commission is concerned about the credibility of the election results which declared long serving President Eyadema a first round winner amid claims from opposition candidate, Mr. Olympio, that he had gained an absolute majority of the votes.
The Commission decision is based on Article 366 bis of the revised Fourth Lomé Convention which calls for consultations between partners of the Convention, in the case of a violation by one of the parties to the Convention of its fundamental principles. These include respect of human rights, the principle of democracy and the rule of law. The consultations are supposed to last no longer than one month. If no solution is found, once the deadline expires, the party that invoked the shortcoming may take appropriate measures including, as a last resort, partial or full suspension of the Convention.
Development co-operation has already been suspended in Togo (Lomé IV has practically not been executed). In 1997, the Commission agreed to release 17 million ECU under STABEX (a fund designed to compensate losses incurred due to the unstable prices of exports) with the gradual resumption of co-operation in view. This however was conditional on the transparency of the presidential elections.
The Commission's proposal to the Council is its first ever call for the invoking of Article 366 bis of the revised Fourth Lomé Convention.
4. EU TO CUT ALL AID TO ANGOLA THAT COULD BE OF HELP TO UNITA
The EU Council has adopted a 'common position' stating that the EU will apply economic sanctions against, UNITA (the rebel faction in Angola). The EU's decision is along the lines of the UN Security Council resolutions of 12 and 24 June in response to the renewal of fighting in Angola and the failure of UNITA to uphold its commitments to the peace process. EU sanctions will: a) freeze funds attributable to UNITA and its senior officials and their families; b) place a ban on imports of diamonds which are not accompanied by an Angolan Government certificate; c) prohibit the supply of mining equipment and services in the areas of the country that are not under control of the Angolan Government; d) ban the provision of automobiles, ships and spare parts to UNITA controlled regions; and e) prohibit official contacts with leaders of UNITA in areas that are not under state administration (with the exception of contacts by the Angolan Government, the UN or the observer states of the Lusaka protocol.
5. PARLIAMENT AND COUNCIL MINISTERS SET TO CLASH AT BUDGET MEETING ON FROZEN BUDGET LINES
The European Parliament Budget Committee along with other MEPs are set to support a proposal by Greek Christian Democrat MEP, Efthymios Christodoulou, for a new inter-institutional agreement designed to prevent the recurrence of the present NGO funding crisis. The crisis arose after the Commission suspended several development and social action budget lines in response to the EU Court of Justice ruling of 12 May that clarified the legal requirements for the execution of the EU budget. In its ruling the Court stated that only 'non-significant' EU actions can be executed by the Commission without prior adoption of a legal base. (see PAF 94)
Under Mr. Christodoulou's proposal, the Commission would be authorised to fund social action programmes and preparatory pilot studies for up to two years, subject to strict financial ceilings. According to some European press reports several EU Finance Ministers have expressed reservations about the Greek MEP's proposal, fearing it would encourage less budgetary rigour. However the EP is threatening to derail the current budgetary austerity programme by using its legal powers to increase spending on other EU programmes by 2.5 billion ECU, if its proposals are not accepted.
Last week the EU Budget Commissioner, Mr. Erkki Likannen, expressed hope that the affair will be resolved at the meeting between the EU Parliamentarians and EU national budgetary officials on 17 July. The Budget Commissioner called on NGOs to direct their campaigns on the issue to the EU national ministers who represent the main obstacle to the resumption of funding of some of the suspended budget lines. NGOs are calling on national governments to deliver on the UK Presidency's promise to approve most of the outstanding contributions at once. Still many NGOs have said that even if all the funding is released, the delay in payments will mean the end for many small organisations.
6. IN BRIEF
Mr. Richard Wester of the European Parliament's Development Committee secretariat is drafting a paper on south-south co-operation. To this end, Mr. Wester would like a list of southern NGOs working on south-south co-operation to contact for his research. Readers able to assist Mr. Wester, can contact him at rwestereuroparl.eu.int or at Tel: + 32 2 284 2432.
On the initiative of German Social Democrat MEP, Ms. Lissy Groener,
representatives of the Presidency of the EU Council, the Socialist Group
in the EP, the Commission, trade unions and NGOs held talks in Brussels
last week on the priorities of the campaign against the international trafficking
of women to be launched in 1999.