The European Union has suspended $32 million in budget support to Nicaragua this year to protest the Daniel Ortega government's failure to comply with the EU's governability, transparency and human rights requirements.

The European Commission's spokesman in Nicaragua, Pedro Mucciolo told The Nica Times yesterday the EU will release only about half the $68.2 million in aid it planned on providing for Nicaragua's government budget this year.

The EU's aid suspension comes after the U.S. government froze $64 million in aid under its Millennium Challenge Account in Nicaragua because of the impoverished country's deteriorating democratic freedoms.

U.S. Ambassador to Nicaragua Robert Callahan told reporters yesterday that Nicaragua has three months to find a solution to its electoral crisis, in which the polarized country has come to an institutional standstill after allegations that the Nov. 9 mayoral elections were rigged by the ruling Sandinistas. Otherwise, Nicaragua's frozen Millennium Challenge aid will be cut for good. The United States has backed opposition calls for a vote recount with international observers.

“Nicaraguans are the ones who have to find a solution to this problem,” Callahan said.