Scoop: The EU aid cuts revealed

The European Commission is planning to slash funding to the world’s poorest countries over the next three years, according to internal figures seen by Devex. A document shared with European Union member state representatives this week shows an average annual reduction across least-developed countries of 35% for 2025-2027 when compared to the amounts allocated for 2021-2024. Haiti is set to receive €5 million ($5.5 million) per year through 2027, for instance, down from an average allocation of €33 million per year in 2021-2024. The Central African Republic can expect to receive as little as €12 million per year, down from €43 million. Low- and middle-income countries will see an average reduction of 37% and upper-middle-income countries 40% for the same period, according to Devex’s calculations. Assistance to countries in Africa and the Indian Ocean will drop by 26%, Asia and the Pacific by 31% and the Americas and the Caribbean by 58%, according to the document. The funding breakdown also shows that amounts so far committed for some countries have fallen far short of what was foreseen at the start of the EU’s collective budget for 2021-2027. Nicaragua was allocated €82 million for 2021-2024, for instance, but as of this month only €38.9 million has been committed; Vietnam has seen €165.9 million committed of its allocated €210 million; Honduras, €79.3 million of its €128 million; Gabon €2 million of its €11 million; and Liberia €83 million of its €191 million. A commission spokesperson told Devex by email that the EU executive does not comment on leaks, and that the budgetary planning process is “still ongoing and we cannot prejudge at this stage.” Negative opinion The cuts are the commission’s way of implementing EU national leaders’ decision in February to raid the bloc’s collective 2021-2027 development budget by around €2 billion in order to bolster other priorities, like supporting Ukraine and stopping migration to Europe. Sources told Devex that the commission’s development department successfully resisted a move by Hungary’s EU commissioner, Olivér Várhelyi, which would have seen countries under his responsibility in the EU neighborhood protected from the cuts. The commission’s department for humanitarian aid also objected to the current figures, but was eventually overruled by the office of commission President Ursula von der Leyen. Janez Lenarčič, the EU humanitarian commissioner, used an appearance at the European Parliament earlier this month to warn that the nexus between short-term aid and longer-term development risked being broken in fragile countries if too much development spending continues going to infrastructure projects rather than issues like health and education. In the document seen by Devex, the commission explains that lower country allocations in coming years are not only a result of the cuts approved by EU leaders. It cites two other factors: the tendency for country amounts to be higher in the first half of the commission’s seven-year budget, and the need to hold funds in reserve in regional programs in order to cover the potential use of guarantees offered by the commission to mostly European development banks. ‘Economic foreign policy’ Among the few countries that will see their allocation go up is the West African island nation of Cabo Verde, where the commission and European Investment Bank are investing in ports and renewable energy infrastructure, and Mauritania, where Brussels has announced an investment package tied to support on stopping migration. As Von der Leyen begins a second five-year term, her commission is embracing a more openly self-interested approach — pitching development spending as part of what it now calls its “economic foreign policy.” Meanwhile, NGOs and some members of the European Parliament, are worried that the commission’s latest infrastructure strategy, dubbed the Global Gateway, risks championing EU business interests over the bloc’s treaty obligation to prioritize poverty eradication in its development work. In June this year, representatives from EU states in Brussels expressed concern that official development assistance to least-developed countries from the commission and EU states combined was falling — down to 0.10% of GNI in 2022, below the United Nations target of 0.15-0.2%. The commission’s cuts follow a spate of major European donor nations reducing aid spending, including heavyweights like the Netherlands, Sweden, France, and Germany. That is causing consternation among officials at the World Bank, GAVI, the Vaccine Alliance, and the Global Fund to fight AIDS, Tuberculosis and Malaria, all of which face replenishment drives through to 2025.