EU will struggle to replace the void left by USAID as European countries slash their funding

[EUROPE] The dissolution of the US Agency for International Development (USAID) has made headlines, but "very regrettable" cuts in European assistance funding are also contributing to a gap in support for some of the poorest people in the world's most vulnerable states, according to MEPs and NGOs. According to Isabella Lövin, deputy chair of the European Parliament's development committee, cuts to USAID would have "very dramatic consequences around the world." However, she condemned recent choices by EU member states to slash their aid funds as "very regrettable" and "wrong". She noted that the EU will be unable to cover the gap.

The decline in aid budgets comes at a time when global humanitarian needs are reaching record highs. According to the UN, over 360 million people will require assistance in 2024, a 30% increase from just two years ago. Yet, as conflicts in Sudan, Gaza, and Ukraine persist, and climate-related disasters intensify, donor nations are pulling back—raising fears of a cascading crisis in regions already teetering on the brink.

"If we want to ensure global security and stability, the EU and its member states must engage in democracy, poverty eradication, and assistance for communities and individuals in developing nations. That is a way to prevent conflict, involuntary migration, and instability, which we do not want to see," said Lövin, a former Swedish foreign development minister.

Germany, the EU's largest donor, which spent 0.79% of its national income on overseas development assistance in 2023, is on track to reduce its aid budget under Friedrich Merz's government, according to a coalition agreement announced last week that does not commit to maintaining the 0.7% UN spending target. The German government reduced its aid budget by €1.6bn in 2023 and trimmed a further €1bn in 2024, according to Concord, an umbrella group of development NGOs.

Analysts warn that Germany’s retreat could trigger a domino effect among other EU nations. “When a major player like Germany scales back, it sends a signal that austerity in development aid is acceptable,” said Jan Orbie, a professor of European foreign policy at Ghent University. “This undermines decades of progress in building trust with Global South partners, many of whom already view Western commitments as unreliable.”

The majority of EU countries, including France, Italy, and Spain, reduced development contributions in 2024 compared to the previous year, according to the NGO. Outside the EU, the UK is on track to reduce its aid budget to its lowest level since records began, spending only 0.23% of national income in 2027.

Charlotte Slente, secretary general of the Danish Refugee Council (DRC), one of Europe's largest non-governmental organisations (NGOs), has encouraged the British government to reconsider its decision to decrease aid to fund defence. Security is more than just hardware; it is also about soft power. "And if you don't invest in humanitarian issues and help for vulnerable communities, there may be more war, displacement, and instability," she said.

Slente predicted "some difficult years" ahead, as rising humanitarian demands meet dwindling funds. The Democratic Republic of the Congo expects an additional 6.7 million displaced people by the end of 2026, adding to the global total of 122.6 million people forced to from their homes due to conflict, political unrest, or climate-related calamity.

The ripple effects of these cuts extend beyond immediate humanitarian crises. Education and healthcare systems in low-income countries, heavily reliant on foreign aid, face collapse. For example, in Mali, where 40% of the health budget comes from international donors, clinics are already reporting shortages of essential medicines. Similarly, school feeding programs in Ethiopia—critical for keeping children in classrooms—are being scaled back, risking a surge in dropout rates.

Within hours of taking office, Donald Trump declared an immediate 90-day moratorium on all US foreign aid, including more than $40 billion for international projects through USAID. According to the Organisation for Economic Cooperation and Development, the United States was the world's greatest aid contributor in 2023, spending $65 billion on official development assistance, accounting for 0.24% of national revenue.

For the DRC, the impact was immediate. USAID has contributed one-fifth of its funding, supporting 24 of its 40 initiatives, including monetary assistance for needy people in Sudan, combating child malnutrition in Cameroon, and cleaning mines in Colombia.

Since the cuts, the NGO has laid off 1,400 individuals, "many of whom work in labour markets where it is difficult to find new jobs," Slente stated. The council believes that cuts to USAID will prevent 2 million individuals from receiving assistance. "It is unprecedented in the 70-year history of our organisation that you have cuts carried out in this way," Slente told the crowd.

“All of that has been cut from one day to the next meaning that some of the internally displaced people in Afghanistan now wanting to return to their villages are no longer able to do so because there’s no safe drinking water or sanitation available,” she said.

Slente voiced alarm about the "vast void" that is emerging between emergency help and economic development programs, which could leave millions of poor people who do not fit into either category. She stated that unstable states that "maybe don't have immediate humanitarian needs" but lack stable administrations appealing to Western donors interested in infrastructure projects were the most likely to be disregarded.

The shift toward "strategic" aid, which prioritizes geopolitical objectives over poverty eradication, has sparked strong criticism. According to an Oxfam research from 2024, more than 60% of EU development contributions now go to middle-income countries hosting migration routes or vital mineral sources, while the poorest countries see their share dwindle. "This isn't just about morality; it's about effectiveness," explained Lydia Zigomo, Oxfam's regional director. "Neglecting the most vulnerable fuels the very instability donors claim to fear."

She went further: "I think there is a risk here that everyone will then crawl into that corner of saving lives again and again, and not building up the resilience of the populations; for instance by providing support for people being able to sustain their own living."

Lövin, a Green MEP and former Swedish deputy prime minister, criticized the emphasis on aid aimed at facilitating EU access to raw commodities, energy, and migratory control, namely the global gateway, the bloc's response to China's Belt and Road Initiative. Launched in 2021, the global gateway seeks to gather €300 billion (£260 billion) in public and private capital over five years to fund infrastructure projects in developing countries.

"Some of these projects may be useful, but they cannot be implemented in conflict-affected areas and countries, as well as least developed and fragile countries. Because you don't have investment certainty there, firms won't go," she explained.

Europe's development partnership "needs to actually go back to its roots to really work long term on poverty eradication, on empowerment of the people and looking at their specific needs and not the needs of the donor", according to her.

Instead, she urged the EU to focus on issues such as democracy, gender equality, and sexual and reproductive health - "things that the Trump administration is ideologically opposed to".

Lövin claimed that the US was "setting up the perfect storm" by slashing its aid budget and imposing "absurd" tariffs on poor countries. She spoke before Trump lifted the "reciprocal tariffs" for 90 days, but all foreign imports to the United States bear 10% charges, and uncertainty remains high.