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The European Union (EU) has disbursed about EUR 35 million (an equivalent of 70 million Ghana cedis and approximately 52 million dollars) to Ghana for economic stabilisation. A statement issued by the Delegation of the EU in Ghana in Accra on Monday said this followed a financing agreement signed between Dr Kwabena Duffuor, Minister of Finance and Economic Planning and Mr. Gary Quince, Director, Sub-Saharan Africa, Caribbean and Pacific Regions of EU's EuropeAid Co-operation Office. It said the agreement was part of a new mechanism created by the EU in 2009, the Vulnerability Flex (V-Flex) to support the most vulnerable and adversely affected African Caribbean and Pacific (ACP) countries by the global financial crisis. The V-Flex works pre-emptively, based on forecasts of fiscal losses and other economic and social vulnerability criteria, helping to ease the impact of the crisis rather than acting after the damage is done. "The V-Flex illustrates the capacity and willingness of the EU to deliver critical support with a very short lead time," it said. The statement said Ghana was among those ACP countries benefiting from the new V-Flex instrument because the crisis had indeed affected the economy, particularly in terms of a decline in economic activities, of reduced credit to the private sector and in the flow of private remittances from abroad. "As it was forecasted, the favourable prices for cocoa and gold commodities have not been enough to help Ghana mitigate the negative impact of the financial and economic crisis," it added. It said the assistance was expected to have a significant impact on Ghana's fiscal sustainability in 2009, closing a significant percentage of her financing gap; adding" it should not only help Ghana to mitigate the effects of the crisis but will also allow her to maintain priority public expenditures, especially in the social and health sectors". The statement said the V-Flex funds being channelled through the Multi-Donor Budget Support (MDBS) Framework would complement the EUR 174 million budget support allocation to Ghana under the Millennium Development Goals-Contract (MDG-Contract). Participating donor partners in the MDBS are; African Development Bank (AfDB), World Bank, EU, Germany, France, UK, Canada, Denmark and Netherlands. The MDG-Contract was signed by the EU and Ghana in July 2009 to be implemented over a six-year period from 2009 to 2014. The statement said the V-Flex disbursement had increased EU's total budget support to Ghana for 2009 to EUR 69.02 million. It said EU had in addition, made EUR 15 million food facility budget support allocation to Ghana to assist her overcome fiscal imbalances linked to food price crisis and would be complementary to the MDG-Contract and the V-Flex with disbursement expected early next year 2011. The statement said in view of the increasing need for more robust national institutions and systems to improve the effectiveness of aid, the EU would continue to provide further support on Public Finance Management.