The European Union has warned Fiji and other South Pacific countries to use the aid they have been allocated, or lose it.
The warning is contained in the European Union's Pacific annual report released in Suva ahead of the ACP/EU aid meeting in Nadi next week.
The report says poor performance on the part of the Fiji government in implementing EU-funded projects meant there was a penalty drop in aid from 24 million US dollars to 17 million for the period 1995 to 2001.
The head of the EU office in the South Pacific, Frans Baan, says under the new guidelines imposed under the Cotonou Agreement, Fiji will need to show it can use the money properly.
Mr Baan says Pacific nations such as Fiji, Tonga and Samoa need to accelerate development co-operation with the EU if withdrawl of grants already provided is to be avoided.
He says the challenge is to perform well so aid allocation can be increased.
