EU says aid to Vietnam depends on reforms HANOI - European Union aid to Vietnam could be affected if Hanoi does not halt perceived backsliding on economic and political reform, Germany's ambassador to Hanoi said on Thursday. The EU was concerned Vietnam had become less tolerant and thought the country's worsening economic performance might be partly due to increased conservatism in the communist-ruled country, said ambassador Wolfgang Erck, representing the EU while Germany holds the organisation's presidency. ``Reform policy has been slowed down and economic policy is less courageous than it was at the beginning of the '90s,'' Erck said. ``We have the impression there is less tolerance now, more limitations for the press (and) religious communities, and we have concerns over other sectors...(such as) political prisoners,'' he added during a news conference called to launch an overview of EU development cooperation activities in Vietnam. Erck was speaking ahead of mid-year meetings on Monday and Tuesday between Hanoi and representatives of Vietnam's bilateral and multilateral donors as well as foreign investors. He said that the EU -- which has pledged $1.71 billion in development assistance in recent years -- assisted Vietnam in the expectation that the situation would improve. ``We still believe in the future of the country otherwise we would not spend our money here,'' Erck said, adding that around $500 million had been disbursed. He said the EU had welcomed Vietnam's promise to accelerate sectoral and structural reforms. ``The volume of development cooperation from the EU to Vietnam is very substantial. It will go on but I have doubts if it will grow unless the Vietnamese government proves its willingness to push towards a market-oriented economy,'' Erck said. He added that concerns on human rights in Vietnam were growing and that a worsening of the situation would strain development cooperation relations between the grouping and Vietnam. ``We look very intensely at the situation and if it does not go the way we like it we could, of course, reconsider our development aid,'' Erck said. Vietnam's donors at the annual World Bank Consultative Group meeting late last year pledged $2.2 billion in fresh aid and an extra $500 million conditional on Vietnam taking specific economic reform steps. In the past couple of years donors have urged Hanoi to speed up reform to combat growing frustration among foreign investors and to lay the foundation for sustained economic growth. Since 1993 donors have pledged Hanoi some $13.1 billion in development assistance, but Vietnam's bold 1986 ``doi moi'' economic restructuring plan, later supported by international aid, led to a decade of strong economic growth and poverty reduction. But donors warn the momentum is flagging and that Vietnam faces a serious economic situation. Reuters - June 10, 1999.