The European Commission approved, on 2 September, the first two financing decisions under the €264 million 2010 allocation of the V-FLEX mechanism to help the most vulnerable African, Caribbean and Pacific (ACP) countries cope with the impact of the financial and economic crisis. The V-FLEX mechanism is a short-term instrument with a budget of €500 million for 2009-2010.

Fifteen countries have already benefited from €236 million in funding allocated in 2009.

The new financing will help 19 countries to maintain their level of public spending in priority areas and therefore mitigate the social impact of the economic downturn, notes the Commission. The following are concerned: Antigua and Barbuda, Benin, Burundi, Burkina Faso, Cape Verde, the Central African Republic, Grenada, Guinea Bissau, Haiti, Lesotho, Liberia, Malawi, the Democratic Republic of Congo, Samoa, Sierra Leone, Togo, Tonga, Tuvalu and Zimbabwe. The financing decisions in favour of Burkina Faso (€14 million) and Grenada (€3.5 million) were adopted on 2 September. Decisions for the other countries will follow during the course of this autumn, adds the Commission.

The V-FLEX mechanism works pre-emptively, based on forecasts of fiscal losses and other vulnerability criteria, helping to ease the impact rather than acting after damage is done. It acts as a complement to the loan-based assistance of the World Bank, the International Monetary Fund and other regional development banks.

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