Associated Press

July 13, 2009

The European Union said Friday that it was the world’s biggest aid donor last year, spending euro 12 billion (US$16.7 billion) on poorer nations – or about 60 percent of all global aid.

The EU’s development commissioner Louis Michel said the economic downturn made aid “more crucial now than ever,” as officials held talks with the World Bank and other aid agencies about coordinating their spending in poor nations.

The EU and the World Bank are calling for more money to be spent on major projects that boost a country’s economy by improving its infrastructure, because this is most likely to suffer as aid budgets are cut back.

They said euro 43 billion is needed every year to pay for schools, water supply and energy projects.

The World Bank, which is funded by governments worldwide, increased its spending to euro 14.4 billion last year, up 20 percent from 2007.

The EU said last year’s aid was a 13 percent increase on the euro 10.6 billion it gave in 2007.

Soaring food prices forced it to allocate an extra euro 340 million to aid and set aside euro 1 billion for food that it will spend this year and next year.

It also promised Georgia euro 500 million to help rebuild the country after Russian troops invaded last August in a dispute over two breakaway provinces.