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EU threatens to stop Pak aid

John Morrison in Tampere, Finland

The European Union has threatened to freeze aid and lending to Pakistan to push the military to restore democracy.

''We are preparing a declaration or statement by the summit tomorrow,'' Foreign Minister Tarja Halonen, of EU president Finland, told a news conference yesterday after the first day of an EU summit on crime, justice and asylum policies.

''We want to show economic consequences because we think that might help,'' she said.

A draft likely to be approved by heads of government on Saturday demands that Pakistan produce a timetable for the restoration of civilian rule by next month or risk the suspension of new EU development aid, diplomats said.

The draft said the EU was 'gravely concerned' by the developments in Pakistan, condemned the recent actions of the military and called on it to ''restore the freedom and respect the legal rights of those under arrest''.

Describing the immediate restoration of democracy and the rule of law as essential, the ministers urged continued dialogue between Pakistan and India.

''The EU believes strongly that Pakistan needs stable, transparent and accountable government in order to sustain its economic reform programme,'' the draft said.

''Without such a programme future IFI (international financial institutions) lending should be withheld,'' it said.

Diplomats said a withdrawal of lending by the International Monetary Fund and World Bank would have serious consequences for Pakistan's crumbling economy.

UNI

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