The European Delegation to Vietnam has announced a total of 29 million euros (US$41 million) in grants to support poverty reduction efforts in Vietnam.
Of this grant, 17 million euros will be used as the final installment of the European Poverty Reduction Support Program, a 44-million euro agreement between the EU and the Vietnamese government signed in 2009.
The remaining 12 million euros will support the government's efforts in reducing poverty in communes and villages in mountainous and ethnic minority areas.
"Disbursement of both grants is not only subject to satisfactory progress in macro economic and public finance management policies reforms and in poverty reduction achievements, but also to a firm commitment from the government to ensure macroeconomic stability and its focus on poverty-reducing growth," the EU Delegation said in a statement.
EU Chargé d'Affaires, Emmanuel Mersch, said the government has demonstrated its firm intention to respond to the economic challenges, reduce inflation and restore stability. He added that "initial results of the implementation of the measures have so far been encouraging, with a number of positive trends emerging," but cautioned the government not to declare victory too soon.
"The disbursement of 29 million euros is a clear indication of the EU's firm intention to continue supporting the government's reform strategy and its poverty-reduction agenda, particularly at a time where Vietnam is facing significant macroeconomic challenges which impact the poorest members of society the hardest," Mersch said.
From now until 2013, the EU Delegation is planning an additional 150 million euros ($212 million) in grant support to poverty reduction efforts and health sector improvements, the statement said.
Mersch told a press briefing in Hanoi on Friday that the European debt crisis could delay financial support to Vietnam, but added the funding would not be cut.