A lot can happen in a few years. In 2005 world leaders stood proud as they promised to double aid to the poorest countries in Africa. But fast forward to today and despite promises "not to balance the books on the backs of the poor", there are worrying signs resolve is fading. Murmurs in Australia suggest politicians are considering taking from the aid budget to resolve the deficit. Aid from rich countries fell by £2.14bn last year. Commentators say that the "golden era of overseas aid is over". Yet we have more evidence than ever before that aid is working and that we have achieved remarkable results - not least over 50 million more children enrolled in school in the last decade. We also know, with over a billion people still living in extreme poverty, the job is not yet over. If we are to keep winning the fight against extreme poverty, hunger and disease every penny counts.

One of the most important battles for aid is being played out in Brussels where leaders from 27 countries are debating how to allocate the next European budget. The negotiations will set in stone the amount the EU gives in aid for the next seven years. The amount proposed to be used to tackle extreme poverty is just 5%, a small fraction of the overall budget. But this equates to a potential €57 billion for the world's poor. Yet as European countries fight over far larger chunks of money for things like the Common Agricultural Policy, which subsidises farmers in Europe often to the detriment of developing countries, there is a risk the small amount set aside for aid will get caught in the crossfire. Leaders must not let that happen.

Between 2004 and 2009 EU aid helped more than nine million children get a primary education, vaccinated more than five million against measles and made sure more than 31 million people have access to safe drinking water. Of all the spending in Brussels it is aid that has the greatest euro for euro impact on people's lives. Not only does EU aid save lives around the world, the EU aid policy also influences the policies of its member countries. This is why Bill Gates branded the EU "the most influential aid donor in the world" earlier this year. What is decided by the European Union will not only determine a significant amount of the world's aid, it will also set important precedents about the role of international aid in the next decade. The negotiation of the European budget is also an opportunity for leaders of countries like the UK and Sweden to pressure Germany, France, Italy and others to join them in giving 0.7% of national income in aid.

The EU aid budget often comes under criticism. For example, media reports today claim 'most EU aid 'goes to richer nations'. The reason for these headlines is that some of the money given to EU candidates, such as Turkey, is classed as aid according to international criteria. However, most people understand aid as money governments set aside to support the world's poorest people and countries lift themselves out of poverty. For this purpose, the EU has two pots of money, the financing instrument for development cooperation (DCI) and the European development Fund (EDF), and neither gives money to Turkey, Iceland or any other European candidate.

As part of the negotiations there will be a review of where EU aid is allocated. The world has changed since 2006 when the last aid budget was agreed - with a number of countries successfully graduating to middle-income status. In this budget the EU will need to make important decisions about which countries to graduate from their aid programme. Ministers need to use this opportunity to insist that aid is further prioritised towards the countries and people that need it most.

What is increasingly recognised is that EU aid has vastly improved over recent years. Today it is some of the most transparent and effective aid in the world. An independent study by Publish What You Fund ranked the EU among the top ten most transparent donors worldwide. The UK also ranks the European Commission among the world's top development and humanitarian aid donors. It makes sense for anyone concerned with ensuring aid is as effective and efficient as possible to support channelling a proportion of aid via the European Union. It means we can pool resources with other countries to increase our impact.

Through the EU we can coordinate aid to avoid overlap, save money on delivery, and reach countries that we otherwise couldn't. Take Eritrea for example, the fifth poorest country in the world but not a focus of aid from the UK, France or Germany. The EU was the second largest donor in Eritrea in 2010. Here EU aid supports agriculture so communities can cope with droughts and avoid famine, and it build roads so people can get their goods to market, building businesses and helping people lift themselves out of poverty.

Much rests on leaders at the European Union making the right decisions. We're three years from our deadline to meet the Millennium Development Goals to halve world poverty. A herculean effort will be needed over coming years to reach them - and even then we are only half way to the real end goal. The outcome of these negotiations will have huge implications for the world's poorest people. When European leaders sit at the negotiating table they must remember the lives already transformed by aid and consider the millions still in need. They should strike a deal for the world's poorest people: first, protect aid in the EU budget negotiations. And second, insist that it is further prioritised towards the countries and people that need it most.

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