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Eurozone Crisis Negative Effects on Afghan Aid

in Afghan Business

Eurozone Crisis Negative Effects on Afghan Aid

Italy and Spain, two of the Eurozone countries who are majorly involved in the development and rebuilding process of Afghanistan, are cutting back their aid due to the debt crises widening at home.

Italy scaled back its aid to Afghanistan by 400,000 Euros from this year’s budget. Aid from Italy concentrates more on improvement of education system in Afghanistan.

The 400,000 Euros cut would have most covered fuel and support for Italy’s aid project.

“Due to the economic situation, we’re seeing the biggest amount disappear in a year,” said Colonel Francesco Principe, who heads the Italian civilian and military reconstruction team in Herat province in the country’s west bordering Iran.

Spain has wiped off millions of its aid from this year’s budget.

Italy was hit hard by the economic crisis of 2007-2011. The national economy shrank by 6.76% during the whole period, totalizing seven quarters of recession. According to the EU’s statistics body Eurostat, Italian public debt stood at 116% of GDP in 2010, ranking as the second biggest debt ratio after Greece (with 126.8%).

Spain’s unemployment is at its fresh high record, standing at a rate of 24.6%. With the borrowing costs jumping high, Spain is on the verge of asking for a full bailout.

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