EU unhappy on Madagascar progress, aid stays frozen

Mon Jul 6, 2009 4:52pm EDT

BRUSSELS, July 6 (Reuters) - Madagascar has failed to convince the European Union to unfreeze over 600 million euros ($840 mln) in aid because the Indian Ocean island is not moving towards constitutional order, an EU official said on Monday.

Members of President Andry Rajoelina's army-backed government met officials in Brussels to present a "roadmap" to persuade the EU to unblock aid to the country, whose economy has been hit by political turmoil and the global crisis.

"The results were not at all satisfactory," Stefano Manservisi, director-general for aid and development at the executive European Commission, told journalists after the meeting.

Manservisi said some of the proposals made by the delegation from Madagascar were not inclusive of all political groups.

"The proposals and undertakings from the Malagasy side remain unconstitutional and do not offer any credible prospects for the moment for a return to constitutional order in the short term," the EU said later in a statement.

The international community, which generally labelled former disc jockey Rajoelina's army-backed seizure of power in March a coup, has pushed for an inclusive government, but African Union-led crisis negotiations failed last month.

Several key donors including the United States, Norway and the International Monetary Fund (IMF) have suspended non-emergency assistance since Rajoelina, 35, ousted Marc Ravalomanana and set up an interim government in March.

"We have suspended the current cooperation except for humanitarian aid and some projects that are already under way and will directly benefit the population," Manservisi said.

"At the moment, a portfolio of about 630 million euros remains frozen," he added.

The EU said the aid would remain on hold pending a suitable proposal from the Malagasy side and discussions would continue.

(Reporting by Bate Felix; Editing by Sophie Hares)--