EU Member States are missing their official development aid targets and jeopardising global efforts to reach the Millennium Development Goals, reveals a new report published by CONCORD, the European confederation of development NGOs.

The report, ‘Penalty against Poverty: More and Better EU aid can score Millennium Development Goals’, was released as EU leaders were set to meet in Brussels on 14 June to agree a common position towards the United Nations’ MDG Summit in New York this September.

‘Penalty against Poverty’ finds that EU development aid in 2009 amounted to €49bn or 0.42% of national income — €1 billion less than 2008 levels. Official estimates for 2010 put total EU aid at 0.46% of national income, far short of the 0.56% target for 2010 agreed by member states back in 2005.

In real terms, this represents a shortfall of €11bn in funding with some of the EU’s biggest economies — Italy (€4.5bn shortfall), Germany (€2.6bn shortfall) and France (€800m shortfall) — amongst the worst offenders.

“EU aid efforts are being crippled by a crisis of commitment. In 2005 EU leaders committed to allocating 0.7% of their national income to fight global poverty but 5 years later they are well off-track on aid and abandoning their international commitments on aid effectiveness”, said Hussaini Abdu, Country Director of ActionAid Nigeria. “We are not asking them to get more ambitious about fighting poverty, just keep their existing promises on aid quality and quantity”, he said

The annual AidWatch report notes that although inflated aid figures continued to decline compared to 2008 levels, a staggering €3.8bn of inflated aid — or 8% of the total EU amount — was reported in 2009.

This includes €1.4bn for debt cancellation, €1.5bn in student costs and €0.9bn spent on refugees in donor countries — making real EU development aid only 0.38% of European GNI.

“EU aid is €19bn short of what was promised to developing countries by 2010 to help them meet the MDGs — more than half the estimated extra €32bn required per year globally to meet the hunger goal alone”, said Justin Kilcullen, President of CONCORD. “This is very disappointing from a bloc that calls itself a leader on global development”, added Eduardo Sánchez, President of the Spanish NGO platform.

Reacting to the publication of the report, Development Commissioner Piebalgs said: “This report comes at a right time as EU Ministers of Development will meet on Monday during the Foreign Affairs Council. The European Commission has been calling for Member States to keep their promises on aid. Europe’s credibility rests in sticking to our commitments.”

The report also advocates for new ways to raise money for development such as a financial transaction tax which would bring estimated yearly revenue of €215bn — €1tr at no extra cost to the tax payer.

Read the Aidwatch report here.