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AID

Interns ran Swedish aid projects: report

The Foreign Ministry has criticized its handling of its own portion of Sweden's foreign aid budget, with large-scale Swedish NGO umbrella organization Forum Syd condemning the report as "a slap in the face".

Interns ran Swedish aid projects: report

The internal report looked at how the ministry managed the 12 billion kronor ($1.87 billion) it contributes directly to foreign aid projects. The report did not examine projects funded and managed directly by Sida, Sweden’s primary foreign aid agency.

The reviewers examined some 70 cases over the past few years. Two-thirds failed to get a passing grade when examined on the project’s aim, how it was prepared, documented and lastly, followed up. The report authors also found several cases where interns had been given administrative powers.

Gunilla Carlsson, the former aid minister who was in charge of Sweden’s foreign aid operations during the time reviewed in the report, admitted on Thursday evening that her drive to make the processes of allocating and managing aid more clear had not been enough.

“I didn’t reach all the way,” Carlsson, who left her post one month ago, told the Expressen newspaper.

“As the responsible minister one has responsibility. And it was very clear to me, and I’ve said over and over again, that there were shortcomings that needed to be dealt with.”

Carlsson further commented that the different revenue streams to Sweden’s national aid work was confusing, and said she hoped that the ministry would end up handing over control to the national aid agency Sida.

“Hopefully, that process will now speed up, as we have evidence about the shortcomings that we still need to address,” Carlsson told Expressen.

Annica Sohlström, secretary general of NGO aid umbrella organization Forum Syd, reacted angrily to the report.

“It risks hollowing out the trust also in other players within the foreign aid community,” Sohlström told the TT news agency. “Especially when it turns out that at the top they don’t have a handle on money and procedures.”

Furthermore, Sohlström expressed anger that Carlsson and her ministry had put enormous pressure on Forum Syd to make its accountability structure stronger.

“Gunilla Carlsson’s mantra has been internal direction and control, that we should be able to show where every single krona goes, and to be able to show up our results,” Sohlström explained. “That makes it even more noteworthy that the foreign ministry doesn’t have a grasp on its work.”

Neither the foreign minister nor the prime minister said they were aware of the report, but both denied that internal critique had spurred on Carlsson’s exit from the ministry last month. Hillevi Engström, the former labour minister who picked up Carlsson’s portfolio when she left, said she had not read the report.

Sweden’s total development aid budget for 2013 is about 38.2 billion kronor, according to Sida, with about 18 billion kronor administered directly by the agency.

TT/The Local/at

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FINANCE

‘We’ll be struggling well into next year’: German borrowing to soar amid pandemic

Germany on Friday passed a 2021 budget that once again smashes its "debt brake" rule, promising to shield businesses and workers from the economic hit of the pandemic as cases continue to rise.

'We'll be struggling well into next year': German borrowing to soar amid pandemic
The seating area of a restaurant closed off in Boltenhagen on the Baltic Sea coast. Photo: DPA

Chancellor Angela Merkel's government plans to borrow €300 billion ($364 billion) across 2020 and 2021 combined after the government pledged more than a trillion euros in aid, including through short-time work schemes (Kurzarbeit) and business support.

“The budget is the basis for everyone to be confident that we can provide the necessary economic and social support to get us through this crisis together,” Finance Minister Olaf Scholz told lawmakers.

The budget for 2021, which passed with 361 votes in favour to 258 against, provides for a total of €179.8 billion in new loans and nearly €500 billion in public spending.

It means for both 2020 and 2021, Germany will abandon its cherished “debt brake”, a constitutionally enshrined rule that forbids the government from borrowing more than 0.35 percent of gross domestic product (GDP), before planning to return to no new debt in 2022.

Restrictions to curb the second wave of Covid-19 – including shutting the food-and-drink, leisure and cultural sectors – continue to burden the economy, which previously pushed Berlin to amplify its aid to businesses.

Yet case rates continue to climb. On Friday, Germany reported a record nearly 30,000 new infections and almost 600 deaths in a 24-hour period.

Now, Merkel is facing calls to tighten restrictions again.

READ ALSO: Germany mulls three-week lockdown from December 20th

Aid can't be 'endless'

Despite the “ray of hope” of a vaccine rollout, Scholz said, “we know that… we're going to be struggling well into next year with the health, economic and social challenges that are going to follow from this pandemic.”

Businesses hit by the current closures are entitled to claim aid amounting to up to 75 percent of their revenues for November and December 2019, expected to cost the government some 30 billion euros.

However Economy Minister Peter Altmaier said last week that support for pandemic-hit firms implemented through November and December could not go on “endlessly”.

Nevertheless Altmaier on Friday said he aimed to increase the ceiling for aid from January in the case of a harder lockdown.

Germany's debt-to-GDP ratio will climb to 70 percent this year, Germany's central bank said in a report published Friday.

But public finances will likely improve as coronavirus measures come to an end, it said.

The government expects the economy to shrink by 5.5 percent this year, before rebounding by 4.4 percent next year.
 

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