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. Last Updated: 07/27/2016

EU to Drop Conditional Aid Scheme

BRUSSELS, Belgium -- Following requests from the world's poorest countries, the European Union's head office on Tuesday proposed to end the practice of tying aid to conditions that benefit the donor country economically.

In its proposal, the European Commission advocates the "complete untying of food aid," to countries needing emergency handouts. "Untying of aid is an important factor in improving both the effectiveness and coherence of pro-poor development policy," said Poul Nielson, the EU's development policy commissioner, adding that the 15-nation bloc has already untied aid handouts "to a high degree for more than 25 years."

Under traditional practices, European countries, as well as other Western nations, give financial aid to poorer countries on condition that they use it to purchase goods and services from the donor country. Recipient countries and nongovernmental organizations have long argued that tying aid would render the aid ineffective as many poorer countries are forced to pay for things that would do little to improve their situation.

Meanwhile the EU said it signed a $225 million aid package with countries in eastern and southern Africa and in the Indian Ocean. The funds would be used to promote regional free-trade among the 21 countries -- among the world's poorest -- the commission said.

 European Union foreign ministers on Monday tentatively set May 1, 2004, as the date for the accession of the 10 candidate countries, Reuters reported diplomats as saying.