EU could cut aid to Kenya - senior official

By Huw Jones

STRASBOURG, France (Reuters) - The European Union could cut its aid to Kenya over concerns about disputed elections, the EU's top aid official said on Monday.

Another EU official said the 27-nation bloc, one of Kenya's top donors, was considering suspending all aid and imposing sanctions if mediation efforts to resolve the crisis failed.

"It's difficult to continue the same level of budgetary support if we see that the election has not been fully respected," EU Development Commissioner Louis Michel told a meeting of the European Parliament's development committee.

The crisis has dented Kenya's democratic credentials and rattled Western donors. Post-election turmoil, in which hundreds have been killed, has hit the country's economy as well as supplies to east and central African neighbours.

"We are not in a situation we can call business as usual by any means," Michel said. "We have to adapt our relations."

The EU provided 290 million euros ($431.1 million) in aid to Kenya between 2002 and 2007. A further 383 million euros are planned for 2008-2013.

Leading a group of "Eminent Africans", former United Nations Secretary-General Kofi Annan was due in the east African nation on Tuesday to try to kick-start dialogue between President Mwai Kibaki and his rival Raila Odinga, who have not met since a December 27 vote the opposition says was rigged.

The second EU official said that if Annan's mediation failed the European Union would consider tougher steps.