International agency Oxfam today welcomed the German government's announcement ahead of the G8 summit of an increase in overseas aid of €750m a year for four years starting in 2008, and urged other G8 countries to rise to Germany's challenge.

"With just days to go before the start of the G8 summit in Heiligendamm, the Germans have set a good example by taking a big step forward in terms of their aid to Africa, " said Max Lawson, Senior Policy advisor at Oxfam. "Coupled with the US announcement of more aid for HIV/AIDS, this really lays down the gauntlet to other G8 countries, particularly France and Italy who are failing to deliver promised increases."

However, Oxfam warned that while the German announcement was welcome, it was not enough to meet their promise made at the 2005 G8 in Gleneagles to raise aid levels to 0.51% of Gross National Income by 2010. Based on figures from the OECD, Oxfam has calculated that the German government would need to find approximately 1.5 billion euro each year between now and 2010 to meet this target - twice what was announced.

Lawson: "This is a first step but the Germans need to go further. This is less than half of what is required and will only represent 0.39% of Gross National Income by 2010 - Chancellor Merkel must double this commitment if promises are to be met."

Oxfam also welcomed Chancellor Merkel's proposal to raise money through taxes on the carbon market and said that money raised should be used to help poor countries adapt to climate change. However, the agency insisted that these funds should be additional to existing aid pledges, and not be counted as part of Overseas Development Assistance (ODA).

"The money already pledged is needed to meet international goals to get every child into school, pay for nurses, vital medicines for diseases such as HIV-AIDS, and other expenditures for poverty reduction. Additional money will be needed over and above the UN aid target of 0.7% of GNI to help countries adapt to climate change," said Lawson.

Oxfam also expressed concern about Merkel's acknowledgement of the potential to count the support given by German troops in the Congo and Liberia as ODA on the grounds that military spending should not be counted as aid.

Oxfam response to US announcement on Climate Change

Antonio Hill, Oxfam International's Senior Policy Advisor on Climate Change said: "President Bush's acknowledgement of the threat of global warming and the need for the world to act is welcome. However, we are concerned that his announcement appears to entail a rejection of the current UN process, which all other members of the international community support. Any US plan must work collaboratively within the existing UN framework. Furthermore, we are concerned by the President's proposal that a core group of 13 countries is charged with coming up with a solution to climate change. We believe that all countries must be involved in negotiations on climate change, including the poorest, as they are the most vulnerable to the likely impacts.

"Going into the G8 meeting we are in the unenviable situation of the world two biggest polluters - the EU and US - backing different approaches to solving climate change. This is a recipe for stalemate and inaction. In Germany next week we need to see genuine, honest political dialogue that moves beyond acknowledging the problem, and focuses on multilateral solutions and immediate action to achieve them. It is crucial that G8 countries agree to on measures that will address adaptation needs in developing countries, dramatically reduce emissions and limit global warming to as far below 2 degrees as possible."

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