The European Union is trying to overhaul how it spends foreign aid, aiming to prioritise security, migration and its own economic interests.

“In a world where investments, infrastructure, supply chains have become instruments of power, foreign policy cannot be sentimental,” Jozef Síkela, the international partnerships commissioner, said on Monday ahead of a meeting of EU development ministers.

Under the European Commission proposal for the 2028-2034 budget cycle, the EU would allocate roughly €200 billion to the “Global Europe” instrument for development cooperation, humanitarian aid and neighbourhood policy. The plan includes a €25 billion fund for rapid emergency response, while a separate €100 billion Ukraine facility would sit outside of the budget.

The Commission proposal streamlines several existing instruments into a single fund and drops thematic spending goals, meaning dedicated targets for areas such as climate or gender equality would disappear in favour of greater flexibility.

The EU’s Global Gateway strategy – launched in 2021 and touted as the bloc’s response to China’s Belt-and-Road initiative – remains central. Through that framework, the EU finances infrastructure, energy, health and digital projects globally, with the EU executive claiming that more than €300 billion in investment has already been mobilised.

Why else would we do it?

Under the Global Gateway, there is also a push by Brussels to use its funds to support European companies and Europe’s own economic interests.

When it comes to securing access to critical raw materials, “obviously there is a link to European offtake”, meaning purchase of minerals or metals for Europe, the head of the Commission’s development department told MEPs in 2024. “Why would we do it if it’s not to ensure European offtake? But the investments we bring look at local beneficiation [the mining and processing of materials]. We are doing it a socially and environmentally sustainable way, and creating local jobs and local value addition.”

Meanwhile, Síkela said recently that a ‘European Preference’ to try and ensure European companies win tenders for EU-backed projects will be baked into future EU aid – though that approach has received mixed reactions from MEPs.

“There is clearly a shift towards a more geopolitical, transactional and interest-driven approach to EU external action,” Alexei Jones, who leads the EU foreign and development policy department at the European Centre for Development Policy Management (ECDPM) think tank, told Euractiv.

He views the shift as a “transition from a development instrument with geopolitical ambitions towards a geopolitical instrument with development safeguards”.

Cash but with strings attached

While the ambition of the proposal has been largely welcomed, critics warn that the new approach risks sidelining the EU’s traditional needs-based development model in favour of more transactional partnerships tied to the EU’s strategic interests.

VOICE, a European network of humanitarian NGOs, warned the proposal risks “positioning humanitarian action within broader foreign and economic policy objectives, instead of upholding it as a strictly needs-based and principled response”.

Other groups, including the European Parliament, have called for the return of targets on the proportion of spending going to issues like climate change, arguing this would help balance flexibility with accountability.

Kaja Kallas, the EU’s chief diplomat, defended the new direction for EU foreign aid this week. On Monday, she argued that the bloc must be “more strategic” and align aid, trade and security partnerships with both partners’ needs and Europe’s own interests “to be a geopolitical actor”.

Yet what the EU exactly means by strategic and mutual interests remains unclear, Jones said. “These concepts are becoming central to EU external action, but often remain politically vague.”

(vc, bw)