CERTAIN European Union states are proposing that about ß1,7bn worth of unspent aid funds be used in alleviating the debt burden of the EU's former African, Caribbean and Pacific (ACP) colonies, a move that could substantially lessen the pressure to sell gold stock of the International Monetary Fund (IMF) to fund further debt relief. Philip Lowe, the director-general for development in the European Commission, the EU's executive, indicated on Friday that the proposal to use the aid funds to "strengthen the position of highly indebted ACP countries" would require a go-ahead by the ACP. The proposal, raised by some EU members, had yet to be confirmed. Lowe mentioned the fresh thinking on the controversial issue of financing further debt relief for poor nations in the context of the EU's attempt to assist SA's neighbours to cope with the negative effects of the EU-SA agreement on trade, development and co-operation. The EU is also considering using unallocated funds from the fund to provide budgetary support to SA's Southern African Customs Union partners whose income from the union stands to decline when SA begins scrapping tariffs on EU imports. Lowe stressed that he was not indicating the precise manner in which the unallocated funds would be used. "All I'm saying is in response to specific requests from a (customs union) country, it seems to us there's quite good margin to manoeuvre to build in that extra (budget) support..." The fund is the financing mechanism of the Lomé Convention, the EU's long-standing trade, aid and political accord with the ACP nations. It is understood about ß1,7bn in aid was unallocated during the implementation of the sixth and seventh development funds - which part-financed the third and fourth Lomé. The funds have accumulated thanks to poor aid absorption capacity of the ACPs and due to the conflict situations in about 17 ACP countries which have led to the suspension of EU aid. The suggestion to use unallocated aid to provide debt relief comes in the wake of continuing calls by African governments that rich countries should look at other means of funding further debt relief rather than using extensive sale of IMF gold holdings.
Lowe also disclosed that he expected fisheries talks with Pretoria to start as early as SA's spring. However, informal discussions between technocrats from both sides were taking place. The EU, which has a general negotiating mandate, would have to formulate a more comprehensive position. He said the issue of EU fishermen's access to SA waters should not be looked at in isolation from other aspects of the deal such as co-operation in conservation, research, and assistance with control. The fisheries agreement is inextricably linked to the general EU-SA agreement: in other words, tariff reduction in certain fish-based products will happen only after agreement on a fisheries accord.
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