Germany's coalition government still haggling over aid spending

The two parties that will likely form the next German government disagree about aid cuts, according to a partial draft of the coalition contract leaked to Politico. The center-left Social Democratic Party, or SPD, wants aid to constitute “at least 0.7% of GNI,” aligning with the goal endorsed by the United Nations, the European Union, and the Organisation for Economic Co-operation and Development. While this would be less than the German average spending on official development assistance, or ODA, over the past five years, it’s above 2024 spending and substantially above the average spent by members of the OECD's Development Assistance Committee, or DAC. The larger conservative Christian Democratic Union, or CDU, is arguing for deeper cuts, however. Though it has not specified a number, it has explicitly asked for less than 0.7%. Their draft language vaguely mentions an “appropriate reduction of the ODA-rate” below 0.7% to “consolidate public spending.” After agreeing to large spending increases for defense, infrastructure, and climate this month, the likely next chancellor of Germany, Friedrich Merz, a conservative, is under pressure to prove his dedication to fiscal prudence. He had campaigned for a balanced budget and tax cuts at the beginning of the year, and many in his party believe his infrastructure and climate spending concessions to the SPD last month went too far. The coalition’s leadership committee started negotiations on Friday in a first attempt to bridge the gaps on this and other issues, with the goal of finalizing a coalition contract by Easter. According to the leaked draft, the parties were able to agree on a long list of shared priorities for Germany’s aid efforts, including “effective management of debt crisis,” ending capital punishment, establishing effective tax systems, integrating climate and biodiversity conservation, and using aid to deter migration to Germany. Disaster relief, for which funding was drastically cut last year, is notably absent, and debt remains contentious. In 2023, Germany was one of only five DAC economies to reach the U.N.’s 0.7% of GNI target of aid contributions. It peaked at 0.82% in 2022, driven by an increase of in-country refugee costs brought on by the Russian invasion of Ukraine, as well as crises in Afghanistan and the Horn of Africa. The discussions continue a general downward trend of European ODA over the last several years. Bye bye, BMZ? Meanwhile, politicians are debating whether the German Federal Ministry for Economic Cooperation and Development, or BMZ, originally founded in 1961, should be merged into the Ministry for Foreign Affairs. Proponents from the conservative party argue that such a change would improve coordination — currently, ODA is mainly split between the two ministries, with the foreign ministry implementing disaster relief and the development ministry providing long-term aid. Opponents from SPD said the division allows for development to be prioritized and called for an expansion of the ministry. One particularly vocal opponent is former development minister Gerd Müller, who broke with his conservative party on this issue, arguing that a development minister can dedicate their attention to countries with less obvious geopolitical significance. “I’ve visited 45 African countries at least once during my tenure,” he told German newspaper Schwäbische. Former minister for economic cooperation and development, Heidemarie Wieczorek-Zeul, who is a social democrat, told Devex that an independent BMZ is “indispensable.” “We’ve seen it in other countries: whenever development policy has been folded into foreign affairs ministries, it has led to a decline in quality, reduced scope, and a significant loss of reputation and trust in partner countries,” she told Devex. “Development policy is not a subcategory of foreign policy or geopolitics — it is a distinct field that requires its own expertise, focus, and institutional weight.” What could be lost Germany was the second-largest donor country among DAC members in 2023 — contributing a total of $37.9 billion to development. Despite its high rank, it was already starting a downward trend from peaks in 2021 and 2022. The fall at the time was largely a result of in-country refugee costs and falling tax revenue due to the country’s mild recession. Now, the country is also prioritizing military spending following U.S. warnings that Europe would need to defend itself. Wieczorek-Zeul voiced fears that the cuts in Germany and across Europe will have a particularly damaging impact on health and the rights and safety of women and girls. “Germany must continue to meet — and ideally exceed — the 0.7% target of gross national income for Official Development Assistance,” said Wieczorek-Zeul. “This is the absolute minimum. In a time of multiple global crises, increasing support would be the responsible path.”