NGOs accuse EU countries of inflating aid figures

BRUSSELS, Apr 3 (Reuters) European Union countries are inflating their aid figures by a third, a coalition of non-governmental organisations today said, urging the 25-nation bloc to provide more cash and give genuine data.

The European Union calls itself the world's biggest aid donor, with its own figures showing members provided a total 43.3 billion dollars in 2004 -- over half of all international aid and more than double the U S contribution of 19.7 billion dollars.

But the Concord coalition of more than 1,600 NGOs, including Oxfam and Save the Children, said these figures were misleading because they included debt cancellation.

Of the 41 billion euros that the European Commission last month estimated EU countries to have spent on aid in 2005, the NGOs said 12.5 billion euros should not be classified as such.

Ten billion euros went towards cancelling debt in Iraq and Nigeria, which the NGOs said ''will do little to fight world poverty''.

''It is largely export credit debt, (which) was issued primarily as a means of subsidising European companies operating in developing countries and never had any development purpose,'' they wrote, calling for debt cancellation to be excluded from aid figures.

A spokesman for the executive Commission said in response that debt cancellation was genuine aid as it freed up money poor countries would have had to pay for debt interest.

EU countries committed last year to raise aid to 0.56 per cent of their gross national income by 2010, with the aim of giving Africa at least half of that increase.

There are vast differences in current aid spending within the bloc. Denmark spent 0.85 per cent of its national income on aid in 2004, according to EU Commission figures, while Cyprus and Lithuania spent a mere 0.04 per cent of their income.

The Organisation for Economic Co-operation and Development (OECD) will publish the official 2005 aid figures for EU countries tomorrow.

REUTERS OM BST1626