WRITTEN QUESTION E-0583/04 by Nirj Deva (PPE-DE) to the Commission. EU aid money to Zimbabwe.
Date: 2004-02-26
Institutions: European Parliament, Provisional data
Subjects: EU aid, EU programme, European Development Fund, Zimbabwe, exchange control, exchange policy, exchange rate, official market

8.4.2004

EN

Official Journal of the European Union

C 88 E/195

Should the Commission conclude that Community law is being breached in the case in question, it would
not hesitate, as the Guardian of the EC Treaty, to take all necessary measures, including infringement
procedures under Article 226 of the EC Treaty, in order to ensure the observance of relevant Community
law. The Commission will,
in addition, explore whether the planned operations comply with the
provisions under Title II, Chapter 3 of the Euratom Treaty.

(2004/C 88 E/0200)

WRITTEN QUESTION E-0583/04

by Nirj Deva (PPE-DE) to the Commission

(26 February 2004)

Subject: EU aid money to Zimbabwe

In view of findings made in the Court of Auditors Annual Report for the financial year 2002, more
precisely the part entitled ‘Report on the activities of the 6th, 7th and 8th European Development Funds’,
Chapter V (cid:1) ‘A special case: The decision taken by the General Affairs Council and the monetary situation
in Zimbabwe’, (1), I would like to ask what the Commission is going to do about the waste of EDF
resources (reduction of the value of the EDF resources by 89 % as noted by the Court of Auditors in
Paragraph 68(a)) and the misuse of these resourcesby those members of the Mugaberegime who are listed
in the ‘Council Regulation (EC) No 310/2002 (2) concerning certain restrictive measures in respect of
Zimbabwe’ (Article 2 and Annex 1) but are nevertheless able to obtain foreign currency at the fixed
exchange rate of Zimbabwean ZWD 55/USD 1 at a time when their fellow countrymen have been obliged
to pay Zimbabwean ZWD 1 500/USD 1?

Will the Commission, in light of this scandalous misuse of EU money, stop these kinds of facilities for
foreign exchange with countries who insist on keeping fixed exchange rates, or will the Commission allow
this to happen in the future?

Could the Commission please elaborate why ‘after the Commission delegation had drawn attention to this
development,
it was instructed to continue to apply the fixed exchange rate when it replenished the
accounts used to finance projects and programmes financed by the Community’(see Court of Auditors
Annual Report 2002, Chapter V, Paragraph 63) despite the fact that ‘the Commission incurred a very
heavy loss during 2002 at any point when it paid funds into project accounts held in Zimbabwean dollars’
(see Court of Auditors Annual Report 2002, Chapter V, Paragraph 64)?

(1) OJ C 286 of 28.11.2003, pp. 355 et seq.
(2) OJ L 50, 21.2.2002, p. 4.

Answer given by Mr Nielson on behalf of the Commission

(6 April 2004)

The Commission does not accept the Court of Auditors’ analysis of the situation for the following reasons:

(cid:1) the use of the parallel exchange rate for official transactions by the banks of Zimbabwe was illegal
(see the Commission’s reply to paragraph 62 of the Court’s report); in fact, the Reserve Bank has on
several occasions threatened to prosecute banks trading on the black market. This is why the
Delegation was instructed to use the official rate for the replenishment of project accounts, pending
the outcome of discussions with the Government and the banks;

(cid:1) the Commission was bound, in 2002, in relation to aid from the European Development Funds, by
the procedures set out in the Lomé Conventions, which gave clear powers to the National Authorising
Officer
the funds, and the rules agreed for their
implementation. As the official exchange rate is a matter of national sovereignty, the only possibility
of applying a different rate is to negotiate with the NAO and the country’s banks. This is what the
Commission did when the official rate became unrealistic;

in relation to the management of

(NAO)

C 88 E/196

Official Journal of the European Union

EN

8.4.2004

(cid:1) in particular, the Commission considers that the figure of 89 % ‘reduced value’, which the Court
applies to payments totalling EUR 4,5 million (less than 5 % of total Community aid to Zimbabwe in
2002), reflects neither the real situation nor the circumstances the Commission faced, if the payments
were to remain legal and regular;

(cid:1) In addition to the negotiation of a ‘blend’ rate to offset the effects of the difference between the official
exchange rate and the ‘parallel’ market rate, the Commission and the Delegation took the following
important measures:

(cid:1) reducing payments in local currency to a minimum;

(cid:1) making euro payments outside the country wherever possible (for instance, by focussing the

health programme almost exclusively on drugs procurement);

(cid:1) ensuring that the imprest accounts of local project work programmes have euro components.

Total Community aid to Zimbabwe in 2002 came to EUR 94 million, of which only EUR 8 million was
spent inside the country. Food aid, agricultural inputs, and medical supplies, for instance, were bought
from neighbouring countries.

(2004/C 88 E/0201)

WRITTEN QUESTION E-0585/04

by Bill Miller (PSE) to the Commission

(26 February 2004)

Subject: WTO talks Cancun and Geneva

After the failure of the WTO talks in Cancun and the resumption of talks in Geneva, I would be obliged if
you could provide an update of what progress has been made.

Is the European Union still insisting on new issues being introduced?

Answer given by Mr Lamy on behalf of the Commission

(17 March 2004)

Following the failure of the Cancun Conference, the Commission reviewed its position as set out in its
Communication to the Council,
to the Parliament and to the Economic and Social Committee of
26 November 2003 on ‘Reviving the DDA (cid:1) the EU perspective’ (1), the orientations of which were
endorsed by the Council on 9 December 2003 (2). It can be seen from this that the EU has adopted a
different and more flexible approach to some of the ‘new issues’ referred to by the Honourable Member.

The Parliament discussed the Prospects for the Doha Development Round at its sitting of 13 January 2004.
The Commission very much welcomes the broad support that was given to its approach of giving priority
to multilateral negotiations, being ready to be more flexible on certain topics including the so-called
Singapore issues and itensifying the dialogue with trading partners with the aim of using the coming
months to progress the negotiations in the way that should have happened in 2003.

Since the World Trade Organisation (WTO) General Council meeting on 15 December, where there was a
clear expression by all WTO Members of their political will to continue the DDA negotiations, the
Commissioner responsible for Trade has travelled to Brazil
for a meeting with the G-20, to India,
Bangladesh, Indonesia, and Kenya, met the G90 in Geneva, attended the ACP-EU Joint Parliamentary
Assembly in Addis Ababa and visited to Washington as well as holding other meetings in Brussels. Further
such discussions will be held in the run up to the May WTO General Council meeting.

(1) COM(2003) 734 final.
(2) 15535/03 of 5.12.2003.