The European Union plans to provide an additional 150 million EUR grant support to poverty reduction and the health sector in Vietnam in the years to 2013 if modernisation of public finance management is steadily pursued and a stable macroeconomic environment is maintained.

The plan was announced by EU Charge d’Affaires Emmanuel Mersch at a press briefing in Hanoi on July 1 on the EU’s disbursement of a total of 29 million EUR (41 million USD) in grant to support poverty reduction in Vietnam .

“The disbursement of 29 million EUR is a clear indication of the EU’s firm intention to continue to support the government’s reform strategy and its poverty-reduction agenda, particularly at a time when Vietnam is facing significant macroeconomic challenges which impact the poorest members of the society the hardest,” Mersch said.

The disbursement corresponds to the EU’s ongoing support to two separate development programmes in Vietnam, namely the joint-donor Poverty Reduction Support Credit (PRSC) mechanism, which supports the implementation of Vietnam’s Socio-Economic Development Plan (SEDP 2006-2010); and the Programme 135 phase II (2006-2010) which supports socio-economic development of communes and villages in mountainous and ethnic minority areas.

Of the 29 million EUR, disbursement of 17 million EUR in the PRSC was based on the progress in policy reform made in 2009 by the Vietnamese authorities in key areas, such as the introduction of international audit legislation, the establishment of a framework of national standards and a unified licensing system for health care practitioners, providing guiding legislation for the domestic violence law, and introducing a legal framework on consumer protection.

The remaining 12 million EUR is the single installment of the “Raising the living standards of ethnic minorities in Vietnam ” programme, a grant agreement signed between the EU and the Government of Vietnam in October 2010. Through this support, the EU joined other development partners to provide budget support to the Programme 135 phase II, one of the Government’s key programme to reduce poverty in communes and villages in mountainous and ethnic minority areas.

The EU official spoke of the Government’s Resolution 11, saying that it demonstrates the firm intention of the authorities to take the necessary action to respond to the economic challenges faced by Vietnam , to reduce inflation and to restore stability. “

Initial results of the implementation of the measures have so far been encouraging, with a number of positive trends emerging,” he added./.