The European Union has disbursed a 9 million euros grant (EC$33.6M; BBD$ 25M) for Antigua and Barbuda which was approved last month under the EU's vulnerability assistance scheme to help African, Caribbean and Pacific (ACP) countries deal with the affects of the world economic crisis.
"This grant is proof that the EU is delivering on its promises and is supporting its partners in times of need", said Antigua and Barbuda Minister of Finance, Hon. Harold Lovell during the 2011 Budget Statement.
Antigua and Barbuda is the third Eastern Caribbean country to benefit from financial assistance under the mechanism – the other two being Grenada and Dominica. The vulnerability assistance package will enable the government to reduce its fiscal financing gap by 52% in 2010, in order to maintain priority expenditures, especially social spending. The objective of the budget support is to contribute to macroeconomic stability and to support the implementation of the home-grown National Economic and Social Transformation (NEST) strategy and government's macroeconomic policies.
Approval of the vulnerability assistance package to Antigua and Barbuda is in addition to other EU assistance such as the Public Finance Management Reform Programme (EUR 3.0 million) and Support to Non-State Actors under the 10th European Development Fund.
The Vulnerability instrument is based on forecasts of fiscal losses and other vulnerability criteria. It provides rapid and targeted grants and is acting as a complement to the loan-based assistance of other development institutions, with whose support it was developed.
The economy of Antigua and Barbuda was among the worst hit among the Eastern Caribbean countries in 2009, undergoing a contraction of real GDP of 7.0%. In addition its tourism-dependent economy has been severely impacted. Falling tourism and Foreign Direct Investment-related construction activities have triggered the worst recession in decades and contributed to a sharp decline in government revenue.
