Billions of euros have been lost as pawns in geo-political chess games, but reforming aid allocation is a crucial task.

Howard Mollett BOND

They claimed, in a report published on Tuesday, that the aid programme was "skewed" towards "middle income" countries such as Bosnia and Yugoslavia, for political reasons.

Poorer Third World countries were consequently missing out.

"In our view too much European development assistance is allocated to middle income countries on the basis of political priorities and the wish to foster stability in the countries surrounding the EU - the 'near abroad' - rather than in order to eliminate poverty," the report said.

"If EC [European Commission] development assistance is to contribute effectively to the reduction of poverty and to retain the support of member states whose bilateral aid has a clearer poverty focus, this situation must change."

But an EC spokesman said: "It's a bit rich to accuse the Commission of sending too much money to middle income countries when it's the member states, including the UK, who decide where the money goes in the first place.

He added: "The Commission is very much committed to the fight against global poverty. This is at the heart of EU development policy."

'Bad to worse'

Shadow International Development Secretary Caroline Spelman said she was "appalled" by the report.

"The failure of the EU aid budget to tackle poverty is well known.

"What is shocking is that it continues to deteriorate. This report confirms that it goes from bad to worse," she said.

Urgent reform was needed, as a third of Britain's aid budget is dispensed through the EU, she added.

"Labour have had five years to reform this budget and they have failed. (International Development Secretary) Clare Short should face up to the criticisms in this damning report."

Meanwhile, Howard Mollett of the British Overseas NGOs for Development (BOND) said that EU aid was "failing the poor".

Time for a change?

"Billions of euro have been lost as pawns in geo-political chess games, but reforming aid allocation is a crucial task."

Mr Mollett added that reducing poverty had become subordinate to foreign policy objectives.

That meant that the actual purpose of EU aid development assistance had become blurred.

"It is time to reverse the decline in aid to the poor, and correct the EU's dismal performance," he said.

"The potential for EU aid is great, and worthy of the effort required to improve on its current performance."