We often talk about foreign aid cuts that the United States is making because it is such a vital global donor and because the landscape is so in flux with Donald Trump moving into the White House next month. So — spoilers ahead — we’ll continue parsing the U.S. development agenda next year because our community is likely in store for some seismic changes.
This is a preview of Newswire
Sign up to this newsletter for an inside look at the biggest stories in global development, in your inbox daily.
However, changes are also afoot on the other side of the Atlantic, where critical European donors are likewise slashing aid and plodding through their own political quagmires. Germany’s government just collapsed, France is in perpetual turmoil, and even the northern European stalwarts of foreign assistance are pulling back.
So for this special Saturday edition of the Newswire, we’re looking back at what happened on the continent in 2024 and what those shifts may portend for 2025. Also, keep an eye out for a special downloadable on EU aid coming in January!
+ Did you pay attention? Test your knowledge about global development in 2024 by taking the Newswire year-end quiz, and get a chance to win a free annual Pro membership.
Brussels: Strategic or self-serving?
A certain amount of self-interest has always guided foreign aid. During the Cold War, the U.S. and the Soviet Union raced to lavish countries with money in order to gain ideological allies. The lofty ideals of development aren't immune to realpolitik.
However, today, the European Union is unabashedly embracing self-interest — sorry, “partnerships” — as a driving force in its aid strategy, possibly to the detriment of the U.N. Sustainable Development Goals in the lowest-income countries. Aid advocates worry that Brussels is sidelining poverty, health care, and education in favor of economic interests such as infrastructure deals and political interests such as curbing migration.
In fact, the European Commission is planning to slash funding to the world’s lowest-income countries over the next three years, according to internal figures seen by my colleague Vince Chadwick. How steep are the cuts? The average annual reduction across least-developed countries could total 35% for 2025-2027 when compared to the amounts allocated for 2021-2024.
To put that into perspective, the Central African Republic can expect to receive as little as €12 million per year, down from €43 million. In stark contrast, the West African island nation of Cape Verde will see a sizable bump as the commission and European Investment Bank invest in ports and renewable energy infrastructure there; likewise for Mauritania, where Brussels has announced an investment package tied to support on stopping migration.
It all tracks with the bloc’s “Global Gateway” vision, the EU’s rebuttal to China’s Belt and Road infrastructure extravaganza.
“EU priorities driven by Europe’s quest for strategic autonomy clearly take center stage in the list of projects labeled under the Global Gateway,” Mikaela Gavas of the Center for Global Developmenot Europe tells Vince. “Reducing Europe’s energy dependencies and accessing critical raw materials are at the forefront under the guise of development cooperation.”
Further reading:
• Scoop: The EU aid cuts revealed (Pro)
• EU aid to least developed countries is trending way down (Pro)
• Scoop: Global Gateway 2024 ‘flagships’ reveal EU self-interest
+ A Devex Pro membership brings you essential analysis, data-driven funding insights, and access to the world’s largest global development job board. Get these perks and more by signing up to our 15-day free trial. Check out all the exclusive content available to you.
Franco-German cuts
Of course, helping other countries takes a backseat when your own country is a mess — and it’s not hyperbole to say that Europe’s two largest donors, Germany and France, are political dumpster fires at the moment.
Earlier this week, the German government collapsed after Chancellor Olaf Scholz’s coalition splintered and the unpopular leader lost a confidence vote in Parliament, paving the way for snap elections slated for Feb. 23. It’s only the fourth snap election in the 75 years since the modern state was founded.
In France, President Emmanuel Macron is cycling through prime ministers faster than the Tour de France. In both EU powerhouses, the economies have stagnated and the far right is amassing significant political power, with parties such as Alternative for Germany and National Rally in France advocating for a nationalist — some say isolationist — foreign policy. Translation: Other countries shouldn’t expect money from us (unless it’s to stop migration).
Even before the recent political malaise, once-generous Germany and France were taking an ax to their foreign aid budgets — a trend several years in the making. In 2023, Germany saw €1.7 billion cut from the development budget of the Federal Ministry for Economic Cooperation and Development, or BMZ, and €430 million from the humanitarian budget, compared to 2022, Devex contributor Burton Bollag writes.
Then in January of this year, when the German Parliament adopted a revised budget for 2024, nearly €1 billion more was shaved off the foreign development budget and nearly €500 million from the humanitarian aid budget.
Next year is looking even more grim. In September, Devex contributor Andrew Green reported on a draft budget that spells out nearly €1 billion in cuts to the BMZ, from €11.22 billion this year to €10.28 billion in 2025. The proposed cuts to humanitarian aid are even more drastic, with plans to gut spending by more than 50% — from €2.23 billion in 2024 to €1.04 billion next year.
France intends to cut a further €1 billion from its aid budget in 2025, according to an initial 2025 national budget prepared early this year— having already slashed foreign aid spending last year and earlier this year. With the resignation of Macron’s most recent prime minister, the 2025 budget is in limbo, although there’s no reason to suggest the cuts will be reversed. To the contrary, they could deepen.
“It will be the most vulnerable countries and sectors that will be affected,” laments Olivier Bruyeron, president of Coordination SUD, an association representing 180 French NGOs. “We have multiyear programs which will have to be modified or canceled. Civil society organizations are feeling a great deal of anxiety and disappointment.”
Read more:
• Germany plans billions in cuts to development, humanitarian aid (Pro)
• How Germany is cutting billions from foreign aid (Pro)
• France slashes €1B more from aid budget (Pro)
Reliable no more
In times of turbulence, certain countries could always be counted on to steady the ship. Those times are changing.
Right-wing populism is shaking up bedrocks of foreign aid, resulting in cuts from traditionally reliable donors.
In the Netherlands, a new right-wing coalition agreement, published early this year, revealed plans to cut official development assistance by €300 million in 2025, €500 million in 2026, and €2.4 billion annually from 2027.
The Dutch aid group Cordaid called the cuts “an incomprehensible measure, both morally and strategically,” noting that they were the largest development cooperation cuts in the country’s history.
In Sweden, aid advocates are up in arms over the right-wing government’s plans to terminate all of its funding agreements with Swedish NGOs.
Ostensibly, the move seems to be part of an effort to localize aid — a good thing, right? The government has said the changes will partly remove one layer of management — the Swedish NGOs — and increase support going directly to civil society organizations in low-income countries, while empowering them.
But the Swedish development sector said the reforms are rushed, have not been well thought-out, and will wreak havoc on ongoing development projects operating with nearly 2,000 local NGO partners.
Like the Netherlands — and the EU writ large — Sweden is pulling back on its aid budget, shifting its attention to trade and immigration, and yanking funding from the lowest-income countries.
Read more:
• The Netherlands is cutting billions from aid. What happens next? (Pro)
• Why Sweden tore up its funding agreements with its NGO partners (Pro)
Sign up to Newswire for an inside look at the biggest stories in global development.
About the author
Anna Gawel
Anna Gawel is the Managing Editor of Devex. She previously worked as the managing editor of The Washington Diplomat, the flagship publication of D.C.’s diplomatic community. She’s had hundreds of articles published on world affairs, U.S. foreign policy, politics, security, trade, travel and the arts on topics ranging from the impact of State Department budget cuts to Caribbean efforts to fight climate change. She was also a broadcast producer and digital editor at WTOP News and host of the Global 360 podcast. She holds a journalism degree from the University of Maryland in College Park.
