EU aid chief criticises debt relief plans

The European Union's aid chief dismissed British plans for reducing Third World debt today, saying they would force future generations…

The European Union's aid chief dismissed British plans for reducing Third World debt today, saying they would force future generations to pay the price of glory for today's politicians.

Britain has vowed to use its chairmanship of the G8 bloc of industrialised nations during 2005 and the EU in the second half of the year to make African issues a priority, including debt.

One key proposal for reducing poverty and debt, drafted by British Chancellor of the Exchequer Mr Gordon Brown, is the so-called International Finance Facility (IFF), aimed at doubling aid to the world's poorest countries.

Mr Brown says it would double aid to $100 billion a year by issuing bonds in the capital markets using donor countries' long-term funding commitments as collateral - effectively securitising their aid budgets.

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"Everybody is worried, for very good reasons, about the debt burden of developing countries, so to introduce a new dimension of debt ... only to impose on our children in the donor countries the burden of actually paying what we now take the glory for doing, that I don't like," EU Development and Humanitarian Aid Commissioner Mr Poul Nielson said.

"This should be about solidarity, not about borrowing from our children," the EU's outgoing aid chief, who steps down at the end of the month, told EU lawmakers.

The criticism came as British Prime Minister Tony Blair chaired a summit in Ethiopia, the British-sponsored Commission for Africa, to map out an African policy agenda for Britain to press.

Britain argues that the IFF is essential to meet the Millennium Development Goals, which were agreed in New York in 2000 and include cutting poverty in half, cutting infant mortality by two thirds and ensuring every child has primary schooling.

But Nielson doubted the IFF was the right solution to meet those targets. "I find it worrying to see the proposals from the UK on the International Finance Facility. To put it frankly, I don't like the idea. It smells too much of innovative Enron accounting," he said, referring to the accounting malpractices that led to the fall of the US energy trade giant.