December 2001/January 2002 saw two highly significant developments in the EU – the adoption of a common set of indicators for social inclusion, and the introduction of the euro (€). The conjunction of these two mean that it is now important and opportune for the EU to take yet another major step: the adoption of the target of providing official development assistance equal to 1% of GNP. The purpose of this chapter is to make the case for such an EU aid target, which is more ambitious than that advocated by the UN (0.7% of GNP), and considerably more ambitious than the 0.39% committed by the EU in its (very welcome) statement before the Monterrey Conference on Financing for Development in March 2002. It would more than double the world total of aid and bring within the realm of feasibility the aspiration that developing countries should not be prevented by lack of resources from reaching the Millennium Development Goals agreed at the Millennium Summit of September 2000.

The background to this proposal is that in December 2001, the EU adopted for the first time a set of commonly agreed and defined indicators for social inclusion. These indicators, which cover financial poverty and its persistence, income inequality, regional cohesion, long-term unemployment and joblessness, low educational attainment, life expectancy and poor health, are to be used to judge progress towards Social Europe. They embody the social objectives of the EU. The indicators are to be used to assess current performance, construct league tables of member states, and to monitor the National Action Plans for Social Inclusion.

On 1 January 2002, the euro came into circulation, which means that 300 million people share a common currency as part of a monetary union. A further 75 million people live in the EU, but do not use the euro. If we add the accession countries, due to join in the next few years, then the total population becomes some 450 million and the total gross national product will then be around €10,000 billion (using the American definition of a billion as a thousand million).