Pakistan”s plea to EU Commission: redirect half of 114 million euros grant to budget support

ISLAMABAD:The federal government has requested the European Union Commission to redirect half of 114 million euros grant allocated for reconstruction and rehabilitation of flood affected areas, for budget support, sources in the Economic Affairs Division disclosed.Sources said about a quarter of the EU aid package is directed through the government, while the rest is mostly channelled thorough UN agencies and international NGOs.During a recent visit of some European Parliamentarians, discussing the precise allocation of the 114 million euros, Hina Rabbani Khar, Minister of State for Economics and Finance, said the government would wish 50 percent of this amount be granted for budget support,” arguing that this “would create fiscal space” for the government while avoiding the danger of “re-prioritisation”. This request has again been floated by EAD.Since the funds in question are likely to be channelled via the Development Co-operation Instrument, the EU pointed out that the Development Committee might have reservations on such a course of action – and that it would perhaps be wiser to re-examine this precise proposal.On top of the 150 million euros already allocated, the EU Commission was about to propose a major reshuffle in its ongoing assistance portfolio, redirecting 114 million euros in support of rehabilitation of community infrastructure and restoration of livelihood in flood affected areas across the country. This is to be complemented with another 18 million euros from the Instrument for Stability for support in repair of governance infrastructure and settling administrative and legal issues that affected the flood-hit population (ID-cards, certificates, land registration, disputes, etc – Brecorder