Nauru is a single raised atoll in the Central Pacific, almost midway between Australia and Hawaii. The total land area is only 24 km² and its population is around 13,000 people.

The economy has historically depended on phosphate exports, which provided Nauru with a level of income and prosperity unparalleled in the Pacific islands. Now these deposits are significantly depleted, and remaining deposits are estimated to last for the next 5 to 15 years. Faced with drastically dwindling revenues from the mining operations, and a mismanaged Trust Fund, today the economy has almost collapsed. The country has a very limited potential for sustained economic growth and remains heavily dependent on the Australian financial assistance worth about $ 23-25 M/per year.

This situation has produced considerable political uncertainty in recent years, with successive changes of government and President, and there have been two votes of no confidence in the last 6 months.

The lack of indigenous resources, rehabilitation of mined land and replacing the income from phosphates present long-term challenges for development. In addition, Nauru faces several obstacles common to the smaller island-states of the region: its small size and population; isolation within and outside the country, exacerbated by poor communications infrastructure; lifestyle diseases like obesity, stress, heart disease and diabetes; and vulnerability to natural disasters and climate change.

Key issues in EU-Nauru relations

Nauru became part of the group of African, Caribbean and Pacific states in 2000. Relations are mostly conducted through the EC delegation based in Suva, Fiji. Under the 10^th European Development Fund, the EU and Nauru signed a new Country Strategy Paper for 2008–13 in October 2007, with a budget of € 2.7 M.

The EU’s partnership with Nauru has historically focused on addressing the basic energy needs of the population. The strategy under the 10^th EDF will therefore again be directed at water and energy, specifically renewable energy. The aim is to provide cost-effective and reliable renewable energy, and to promote energy efficiency and self-sufficiency, to reduce fuel import costs and contribute to a cleaner environment.
In addition, a Technical Cooperation Facility will be established to fund necessary local or regional technical assistance, including measures to boost governance, government transparency and regional integration.