EU said it would resume dialogue with Tanzanian authorities once the review of policies was complete, and urged the authorities "to refrain from exerting undue pressure and limitations on diplomatic missions."
EU is Tanzania's main development partner and one of the country's top trade and investment partners.
As Denmark announced the withholding of $9.86 million aid to Tanzania over its human-rights record, the European Union — which recalled its ambassador — stated it was reviewing its policies with Dar es Salaam.
Denmark, the second largest development partner of Tanzania, was concerned by Dar es Salaam regional commissioner's statement ordering a clampdown on gay people. The order was immediately disowned by the country’s Foreign Minister Dr Augustine Mahiga.
Same sex relationship is a crime in Tanzania and perpetrators may face up 30 years in jail, according to the Sexual Offences Special Provision Act (1998) and the Penal Code.
On Wednesday Danish Minister for Development Co-operation Ulla Tørnæs, said: “I am very concerned about the negative developments in Tanzania, most recently unacceptable homophobic comments made by a commissioner. Respect for human-rights absolutely essential for Denmark.”
The Regional Commissioner, Paul Makonda, asked human-rights defenders and people from countries where homosexuality was legal, to "understand, that we as a nation have our own laws, Constitution and norms. In Dar es Salaam being gay is not a right. It is a criminal offence."
Lesbian, gay, bisexual, transgender, and intersexual (LGBTI) rights have been challenged in a number of African countries, including Mauritania, Sudan, Somalia and parts of Nigeria.
In 2014, Norway and Denmark cut aid to Uganda after anti-gay legislation was endorsed by the government. Denmark diverted a $9 million grant while Norway withheld around $8 million.
Ms Tørnæs has also postponed a planned trip to Tanzania, according to Danish broadcaster DR.
The decision by Denmark came as the World Bank also said it had cancelled a plan to loan Tanzania some $300 million after the country reaffirmed its policy of banning pregnant girls from school, and made it a crime to question official statistics.
On Thursday, the EU said it would resume dialogue with Tanzanian authorities once the review of policies was complete, and urged the authorities "to refrain from exerting undue pressure and limitations on diplomatic missions."
The EU said it was concerned generally about "a dark records in human-rights issues, including muzzling of media and political intolerance."
A week later, the EU said that over the past years, its member states “have noticed a shrinking of public space in Tanzania through the tightening of restrictions on the activities of civil society organisations, the media and many political parties.”
"This unprecedented attitude is not in line with the long established dialogue and consultation between the two parties, which the EU deeply regrets," the statement read.
The EU is Tanzania's main development partner and one of the country's top trade and investment partners, according to the statement, which said that "structured political dialogue" with the government would resume after the review is completed.
Meanwhile the Swedish national public TV broadcaster SVT Nyheter reported Tanzania’s Ambassador was summoned by Stockholm for a trial order on Thursday.
"The UD has submitted to Tanzania's ambassador that Sweden is concerned with developments in Tanzania, with regard to democracy, the rule of law and human-rights. And including the treatment of LGBTI people, "said Patric Nilsson, press director of the UD, to SVT Nyheter.
