EU seeks major boost to development in budget amid ‘Europe First’ shift

The European Union unveiled the first draft of its next seven-year budget, known as the multiannual financial framework, or MFF, on Wednesday. The 2028-2034 budget commits €2 trillion ($2.3 trillion), up from the €1.2 trillion in the current budget. Out of that total, €200 billion will go to the Global Europe instrument, the main tool for the EU's external action, including development finance. This is a big uptick from the current budget, which allocates $92.3 billion. The final tally likely won’t be finalized until December 2027, and a lot could change before then. “€200 billion for Global Europe — a staggering 75% increase — shows that the EU wants to play a bigger role on the global stage,” said Alexei Jones, head of the European Centre for Development Policy Management’s European foreign and development policy team, a think tank that specializes in European policy. “But with everything going on, more money for defence and pressures on competitiveness, it’s a tough sell, and we know that this part of the budget is historically prone to major cuts during MFF negotiations.” The draft shows a strong move toward realizing the “Europe First” ideology, which gives European nations and companies priority when making development finance decisions. Lawmakers added vague and flexible wording, giving the commission more power to make unilateral decisions about where money moves while avoiding traditional procedures that allow for many voices. “We want greater flexibility,” said European Commission President Ursula von der Leyen during a press briefing on Wednesday. “Not everything should be decided today for the next seven years; therefore, we want less rigidity in this budget and more room to act.” But the flexibility could lead to confusion about where the money is going. “In our perspective, under the name of flexibility and strategic actions, as of now, there are no guarantees that the resources will be used for development purposes,” María José Romero, Eurodad’s policy and advocacy manager on development finance, told Devex. In addition, details on key priorities for specific regions are placed in the annex of the text, which is much easier to change without reopening the negotiations. “The commission is really trying to put in place a system where it has overall executive control of all the instruments and little room or obligations to consult the council,” said Jones. “There’s a lot of intentional flexibility here. I personally think it’s too much.” What counts as ODA? Experts are also waiting to hear what percentage of Global Europe funds must conform to Organisation for Economic Co-operation and Development’s Development Assistance Committee norms, known as DAC-ability. Currently, 93% of the EU’s Global Europe budget is intended to be DAC-able and therefore intended to be used for overseas development assistance. While experts expect it to decrease, the commission has not yet shared detailed numbers on the new budget proposal. On Wednesday, the commission offered technical briefings on issues of competitiveness, defense, agriculture, cohesion policy, and employment, but no detailed information on Global Europe. Private finance greeted with open arms The new budget proposes awarding grants to European private companies without a call for proposals in areas where the EU has a strategic interest, including anything that will “enhance the Union’s strategic autonomy,” according to an early draft of the budget. “Such a direct award could be justified, for example, to enable investments or finance feasibility studies in strategic areas such as critical raw materials or digital and other infrastructure, in particular as part of integrated packages, to enhance the Union's strategic autonomy,” the budget states. Some experts say this is a misuse of development finance to benefit the private sector. “It’s a very problematic use of development money to subsidize and increase the profits of European private sector companies,” said Romero. Experts say that while the flexibility makes sense for Europe politically, and aligns with the goals of a “Europe First” agenda, it will require far more transparency. “It makes sense politically, but with that kind of agility, you also need stronger checks and transparency, otherwise it’s hard to know who’s really calling the shots or where the money’s going,” said Jones. Update, July 17, 2025: This story has been updated to clarify that the budget is for 2028-2034.