The world needs a leading European Development Agency

Whether it is contributing to food security, fighting global health threats such as HIV and tuberculosis, mitigating the effects of climate breakdown, or enabling education for the poorest parts of humanity, in a world where the Global North and South are still separated by an untenable gap in living standards, foreign aid is a cornerstone for achieving the UN’s sustainable development goals.

In this light, Donald Trump's decisions to suspend all US foreign aid programmes, and to outright close the programmes of the US development agency (USAID) is irresponsible. It will lead to needless human suffering and preventable deaths. Many essential programmes for populations in dire conditions, such as those in South Sudan or Afghanistan, are under direct threat. As the US turns its back on its values and disengages from multilateral policies and institutions (further demonstrated by its withdrawal from the WHO and the Paris Climate Agreement), damaging its credibility and reputation, the EU has the opportunity and responsibility to assume leadership in development aid and give greater visibility and coherence to its commitments.

The EU’s task should not be underestimated. With a budget of $43.8 billion in 2023, USAID was the main vehicle for the US’s contribution to Official Development Assistance (ODA) The abrupt closure of its programmes, the dismissal of staff and the termination of its funding without notice jeopardises thousands of projects in some of the world’s poorest countries. It risks destroying the know-how and relational capital held by its staff and partner NGOs.

The ODA policy was created 60 years ago out of the realisation that the wealth gap between the richest and poorest nations was becoming a threat to world peace. The United States was one of the founding countries of this policy, which from 1970 onwards was accompanied by a target for OECD member countries to allocate 0.7% of their Gross National Income (GNI) to its financing in the form of grants, loans or guarantees. In 2023, Official Development Assistance from OECD member countries reached a record level of $223 billion.

This level of funding is unlikely to be repeated in 2025 as it is not only the US that is cutting its foreign aid programmes. Many European countries are walking back their own commitments, under the dual pressures of budgetary constraints and the rise of short-term populistic narratives. The Netherlands, for example, is planning to cut the ODA budget by two thirds over the next three years. In Sweden, Germany and the UK, the ODA budget is being slashed or, more insidiously, diverted to other policies, such as financing the reception of refugees or aid for the return of migrants. The European Commission itself has been affected by this downward review of international solidarity commitments, proposing a €2 billion cut in credits allocated to the least developed countries, a 35% reduction over the period 2025-2027 compared to 2021-2024.

We are thus witnessing a brutal unraveling in the USA, and a slower breakdown in Europe, of a policy aimed to eradicate poverty and support the poorest and most vulnerable economies ‘towards peace and prosperity’, in the words of the Sustainable Development Goals (SDGs).  With climate breakdown and a crippling debt crisis the number of people living in extreme poverty is rising, as is the number of people suffering from hunger, putting the entire framework of SDGs at risk and adding cumulative migration pressures that will further destabilise entire regions.

The European Union must reaffirm its commitment to the SDGs and commit the necessary multi-year financial means to their achievement. Currently, each EU Member State manages its ODA effort within a national framework, according to its own geographical and thematic priorities. Most Member States have set up specialised development agencies (e.g. the AFD for France, FMO for the Netherlands, GIZ for Germany). The multiplicity of European players, the dispersal of resources, and the inevitable redundancies undermine the visibility and effectiveness of European action. 

From a federalist perspective, Volt Europa proposes that public development aid funding and mechanisms be ‘communitised’. They would gradually be grouped together at European level within the framework of a European Development Agency, which would eventually have authority over a budget of 0.7% of EU GNI. The European Development Agency would be placed under the authority of the High Representative of the Union for Foreign Affairs and Security Policy, who would be responsible for ensuring that the European Parliament deliberates on a multi-annual development aid plan.

Moreover, to ensure a fairer world where human rights and democracy are not optional, Volt promotes a ‘Strasbourg consensus’ in multilateral institutions, based on the following principles: 

• a renegotiation of the debt of the least developed countries within the framework of the Paris Club, a group of major creditor countries.

• the introduction of a new clause in loan contracts signed by developing countries automatically suspending their repayment in the event of a large-scale natural disaster.

• an overhaul of the governance of international institutions, in particular, the recruitment of leaders of the World Bank and the IMF based on skills, and greater participation of representatives of civil society and NGOs in the governance bodies of these institutions. 

• negotiated conditionalities, linked to the fight against corruption, respect for the rights of minorities, and policies for the promotion and protection of women.

The United States is abandoning its 60-year commitment to development and solidarity. China is pursuing a self-interested policy of accessing raw materials and infrastructure under the guise of development aid. And Russia is exporting its weapons and mercenaries to the poorest countries. Being the proponent of a world based on international law, the EU must urgently equip itself with a visible, powerful, and robustly financed instrument of development aid based on a long-term foreign policy vision and rooted strongly in its values. Otherwise, the rule of law, the security and human rights situation in the Global South will deteriorate with drastic worldwide consequences.

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