A look back at European aid's slash-and-burn year
By Vince Chadwick // Jan. 3, 2025
“Very worrisome” — that’s how the outgoing head of the European Commission’s development work, Jutta Urpilainen, summed up recent cuts to foreign aid by national governments in the European Union.
“Many of our member states have decreased their development cooperation funding,” Urpilainen told Members of the European Parliament in September. “And I think this is something we should speak up much more loudly [about], because this is also a political signal which we are sending to our partners, especially in the global south, by cutting our cooperation with those regions.”
In a dark year for development in Europe, however, the commission has been among those ordered to swing the axe.
The battle for Brussels
Back in February, leaders of the EU’s 27 states agreed to amend the bloc’s 2021-2027 budget to boost support for Ukraine and try to halt irregular migration. That meant a €2 billion (about $2.1 billion) reallocation away from development spending, which the commission combined with the preplanned mid-term review of its main development instrument.
It was only in the fall that the commission finalized what those changes would mean, warning that they would require “careful communication” with recipient countries around the world.
That’s because almost all individual country allocations for the period 2025-2027 were severely reduced in favor of regional investment envelopes for sub-Saharan Africa, Asia-Pacific, and Latin America.
The aim is to provide more flexibility to spend trying to spur private investment in countries where the EU sees a strategic interest for itself through the likes of green hydrogen or critical raw materials.
Where that is not the case, however, the cuts will be particularly hard felt.
In the Central African Republic, for instance, funding will drop 73% for the 2025-2027 period compared to 2021-2024, while in Togo and Guinea-Bissau, funding will drop 48%.
Not everyone at the commission agreed with the approach, with the commissioner for humanitarian aid, Janez Lenarčič, telling the European Parliament in September that shifting funds from basic services to infrastructure projects risked leaving people dependent on humanitarian aid.
Ultimately, Lenarcic lost that battle, however, as the commission increasingly orientated its support in aid of its Belt-and-Road-inspired Global Gateway strategy.
And in October, outgoing commissioner Urpilainen said in an interview with the Center for Global Development that money is not the only problem.
In fact, she said the next person in the job should make communication about what the EU is already doing the “highest priority,” and other European officials have discussed feeling “taken for granted” when it comes to ODA.
How France and Germany are cutting aid
The picture is grim in European domestic politics, too.
Germany gives by far the most foreign aid in Europe, with $36.7 billion in 2023 at 0.79% of the gross national income. However, it made steep cuts in 2023 and recently announced plans to trim the development ministry budget from €11.22 billion this year to €10.28 billion in 2025.
And, as Devex reported in September, the cuts to humanitarian aid, which is managed by the foreign office, are even more severe, with plans to more than halve spending from €2.23 billion in 2024 to €1.04 billion next year.
The umbrella organization Venro said it amounted to the country “turning its back on international solidarity.”
Germany may be Europe’s leading donor in financial terms, but in recent years it has increasingly been French President Emmanuel Macron who has fought to keep global development on the mind of EU leaders by regularly convening summits on climate and development.
But that just made France’s steep cuts to its development budget all the more bitter for aid advocates in 2024.
First, in February came the announcement of a €742 million, or 13%, cut to France’s main foreign aid budget line — worth about 45% of the country’s overall official development assistance — for 2024 amid a revised growth forecast.
Then in September, the government proposed a further 23% cut to the same budget line for 2025 compared to the already reduced figure for 2024, later upped to a 35% cut — around €2 billion — by amendments in late October.
Those 2025 cuts were delayed when the government of Prime Minister Michel Barnier collapsed in early December, precisely as Barnier tried to force through next year’s budget.
Time is running out to either pass the 2025 budget or roll over the 2024 version under new Prime Minister Francois Bayrou, though it seems clear that foreign aid will continue to be in the government’s sights.
Fabrice Ferrier, director of Focus 2030, a French development advocacy group, told Devex by email that under the September proposal official development assistance was the most heavily hit budget line — proportionally and in absolute terms — despite representing less than 1% of France’s total budget.
What’s happening elsewhere in Europe
Whereas France and Germany might plead budgetary constraints, other European aid stalwarts have also targeted aid on more ideological grounds.
In Sweden, the right-wing government this year announced that it would terminate all funding agreements with Swedish NGOs early, forcing them to reapply in competition with those in low- and middle-income countries. That followed the new government’s move to more than halve the aid budget in 2023, bringing the first country to reach 1% of GNI for ODA below the global 0.7% target.
The European NGO Confederation for Relief and Development, or CONCORD, wrote in its Aid Watch report this year that Sweden’s development policy has been “reshaped” in 2023 and 2024, with supporting Ukraine and the neighborhood, synergies between promoting exports and development, as well as migration, the main priorities.
Meanwhile, in the Netherlands, the right-wing governing coalition announced plans to cut funding to local and international civil society organizations by around two-thirds — from €390 million-€565 million for 2026 to 2030, down from €1.4 billion in the five-year period ending in 2025.
The Dutch minister for foreign trade and development, Reinette Klever, hails from the far-right Party for Freedom, or PVV, which won by far the most seats in the November 2023 election.
PVV played a key role in negotiating the agenda of the right-wing coalition, including plans to progressively cut the overall aid budget by up to €2.4 billion from 2027.
In 2024, the development budget was roughly €3.5 billion overall.
Now what?
Masood Ahmed, president emeritus of the Center for Global Development. Photo by: Deepu Das / WEF / CC BY-NC-SA
Masood Ahmed, president emeritus of the Center for Global Development. Photo by: Deepu Das / WEF / CC BY-NC-SA
Speaking at the Australasian Aid Conference in Canberra in December, Masood Ahmed, president emeritus of the Center for Global Development, said that “expanding needs and shrinking budgets” meant that donors now needed to “show more honesty and realism, making only deliverable commitments and being transparent about constraints.”
Ahmed, who formerly held senior positions at the International Monetary Fund, the World Bank, and the U.K.’s then-Department for International Development, also argued that donors should “rebuild domestic support through frank discussions about both moral imperatives and self-interest in addressing global challenges.”
Some are trying. Facing potentially steep cuts — still under negotiation — to Belgian aid spending, Jean Van Wetter, the head of the country’s development agency, Enabel, wrote this year that “international cooperation is not charity.”
“We need the rest of the world in order to keep developing ourselves,” he wrote, citing Africa’s young population and potential workforce, its uncultivated, arable land, solar power potential, minerals “critical for the energy transition,” and ideal locations for capturing and storing carbon.
And he estimated that each year Belgian companies sell hundreds of millions of euros worth of goods to international organizations.
It’s not all bad news. Ireland, for instance, notched a record €2.6 billion in ODA in 2023, or 0.67% of GNI.
“Excluding the costs relating to Ukrainian refugees, our ODA amount in 2023 was €1.467 billion, or 0.38% of our GNI,” the government stated in October. “This also represents a record allocation from Ireland to ODA.”
Overall, however, for now the outlook is not optimistic.
Urpilainen’s successor, Jozef Síkela, told the European Parliament during his confirmation hearing as the next EU commissioner for development — formally dubbed “international partnerships” — last month that “of course, there is a shortage of resources,” though he was wary of asking for more.
Such an ask would require a conversation, Síkela pointed out, among what the commission calls “Team Europe” — itself plus EU states, the European Investment Bank, and the European Bank for Reconstruction and Development — on “how to fund it.”
Story by Vince Chadwick
Edited by David Ainsworth and Fiona Zublin
Copy edited by Mauricio Romero
Production by Mariane Samson
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