14 December 2009: Trillions for bankers, only billions for rest of humanity

Climate Answers tries to be optimistic and constructive. We are also supportive of the EU as a forum that is essential to control climate change. However, it is very hard to be either optimistic or pro-EU when one reads that the amount that the EU has offered to developing countries to adapt to the effects of climate change is just 0.05% of the money given to banks last year. The climate money is annual, whereas the bank payment was theoretically a one-off. But even if banks do not get further payments, it will take over four centuries before the same amount has been spent protecting poor people from floods, droughts and disease. Banks are important, but human survival is more important.

In 2008, the EU agreed a bail-out of banks that amounted to over €1.5 trillion ($2 trillion) in guarantees and fresh capital. This included:

  • €500bn from Germany
  • €360bn from France
  • €200bn from the Netherlands
  • €100bn from Spain
  • €40bn from Italy

(See telegraph.co.uk: Europe stuns with €1.5 trillion bank rescue, as France plays role of saviour.)

Last week, the EU agreed €2.4 billion a year for poor countries to adapt to climate change. Over three years the following countries will pay these amounts:

  • Britain – €1.66 billion.
  • Germany – €1.44 billion (Germany has not given any specific figure, but is expected to pay about 20% of the EU total, which would be €1.44 billion).
  • France – €1.26 billion.
  • Sweden – €800 million.
  • The Netherlands – €300 million.
  • Spain – €300 million.

This is much too little, given the scale of the crisis, and it is not even clear that it is new money. Some will be re-packaging of existing aid budgets. 

The fact that the UK is prepared to give more than other European countries, despite still being in recession and with an enormous budget deficit, is not entirely surprising. Prime Minister Gordon Brown has a strong commitment to development. While he was Chancellor of the Exchequer, UK aid spending increased: from 0.24% of GDP in 1999 to 0.51% in 2006. (It fell back in 2007 to 0.36%, but rose again in 2008 to 0.43%; see House of Commons Library: The 0.7% aid target, the UK & the International Development Spending Draft Bill). However, this is still well below the target of 0.7%, agreed by the UN in 1970.

The largest donors in 2008, by volume, were the US, Germany, the UK, France and Japan. The US figure was only 1.8% of its GDP. Only five countries exceeded the target of 0.7%: Denmark, Luxembourg, the Netherlands, Norway and Sweden (see OECD: Development aid at its highest level ever in 2008).


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