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3. Development Aid

European Union member states donated an estimated €47 billion in 2006 in aid to developing countries. This was the equivalent of 0.43% of their GNP, and was higher than the per capita aid levels of other leading nations like the United States or Japan. Of this amount, more than €7.5 billion was channelled through the EU.

The European Development Fund (EDF) is the main way in which EU development aid is allocated to the African-Caribbean-Pacific (ACP) States and OCT. The EDF was created by the Treaty of Rome in 1957 with a view to granting technical and financial assistance, initially to African countries which at that time were still colonised and with which some Member States had historical links. Usually lasting six years, each EDF lays out EC assistance to both individual countries and regions as a whole. The EU is currently on its 10th EDF.

The majority of EU development aid is in the form of non-repayable grants. A limited amount of soft loans and investment capital are made available by the European Investment Bank (EIB). The EIB was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. Not only does the EIB contribute towards the integration, development and economic cohesion of Member States, but it also made loans to partners outside Europe, mainly developing countries, worth €5.9 billion in 2006.

Over half a century, the EU has funded thousands of development projects across the third world. The priority for the Union is to tackle the sources of vulnerability in low income countries, including poor access to food and clean water, or to education, health, employment, land, social services and infrastructure. It also means disease eradication and access to cheap medicines to combat scourges like HIV/AIDS, as well as action to reduce the debt burden that diverts scarce resources from vital public investments back to rich lenders in industrialised countries.

The DG Development is in charge of programming financial resources and supports the management of the EDF and other forms of EU aid. Relations with other development actors and international organizations assure synergy between partners for effective poverty eradication

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