The European Union on Tuesday announced 2.9 million euros in grant funding that is used towards debt relief for Afghanistan.
EU in a statement said that the Afghan government successfully managed to borrow considerable amounts in highly concessional loans from the IMF to cover its fiscal deficit during the COVID-19 crisis.
“Today’s announcement is good news for Afghanistan, as this additional funding will free space to increase the social, health and economic spending in response to the COVID-19 crisis,” EU Chargé d’ Affaires Arnout Pauwels said. “This comes in addition to the substantial support the EU has already provided to Afghanistan to tackle the pandemic, both bilaterally and through the COVAX facility.”
The EU funds are channelled through the IMF’s Catastrophe Containment and Relief Trust (CCRT), to which the EU and its Member States (Team Europe) are the largest donor, with support amounting to EUR 335.9 million globally, which represents 51% of the relief fund. Besides Afghanistan, 27 of the most vulnerable countries around the world will benefit from debt service relief through the support of the EU.
EU said that the newly announced support will also contribute to Afghanistan’s macro-economic stability. “This comes at an important moment, as the EU’s assessment of the government’s performance on the 2020 State and Resilience Budget Support begins. For years, economic stability and sound public finance management have been at the heart of the EU’s dialogue with countries receiving EU budget support,” EU said.
Since the start of the pandemic, the EU has mobilised almost 147 million euros to Afghanistan to address the immediate health crisis and provide humanitarian assistance to the people in need. As the largest donor to the COVAX facility, the EU and its member states have also enabled the delivery of almost 500,000 doses of vaccine to Afghanistan.
