NICARAGUA & EUROPEAN UNION RESOLVE DISPUTE ON HANDLING OF HOUSING ASSISTANCE.

Nicaragua and the European Union (EU) have resolved disagreements that erupted in early July when President Arnoldo Aleman shut down the office administering a US$10 million, EU-financed housing project called Provivienda. The disagreement centered on income requirements for purchasers of the low-cost houses and how buyers were to be selected. In 1995, Nicaragua and the EU signed an agreement by which the EU would construct 500 low-cost houses in the Managua barrio of San Sebastian. The houses were intended for purchase by police and health and education workers who met the family-income qualification of at least US$250 per month. Another 500 less-expensive houses are to be built in Ciudad Sandino west of the city.

Aleman wants 14 houses for supporters

A scandal arose in July when local media reported Aleman had recommended that 14 of the San Sebastian houses go to supporters whose incomes were less than the minimum requirement. Aleman said the EU requirement was set too high for the intended buyers. A local newspaper also reported that Leopoldo Navarro, president of Aleman's governing Partido Liberal Constitucionalista (PLC), asked that party members also receive Provivienda houses. Mauricio Montealegre, director of the Banco de la Vivienda de Nicaragua (BAVINIC), accused Provivienda directors of misinforming EU officials about the income requirements for the targeted homebuyers. He claimed the agreement set the minimum family income at between US$66 and US$222 per month. A Provivienda spokesperson said that requirement would be too low to permit families to pay the US$67 per month mortgage. To the president's critics, the issue was not so much the income requirement as the president's insistence on reserving 14 of the first houses completed for supporters, instead of leaving the selection process in the hands of the Provivienda credit committee. EU Ambassador Kent Degerfelt said he did not accept Aleman's list of recommended buyers. "I think a member of his personal security escort is among the 14 beneficiaries," he said. Another issue in the controversy involves the San Sebastian building site. The project site is located in Managua's historical center near where a new presidential palace and other government buildings are being built. The press has suggested there is speculation involved because the government building program has pushed up the value of adjacent land including the Provivienda site. Part of the administration's...

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