Beyond ODA numbers: the politics behind EU aid cuts. Who pays the price? The Majority World and Europe’s aid crisis.

Looking Back…

As we all know, the EU’s aid commitments are not just fragile, they are also conditional and political. For years, most EU Member States have not met their 0.7% GNI promise to partner countries. But subsequent to the wave of elections across the continent and the greater influence of far-right parties in governments, aid is being slashed. Billions of euros of aid have been redirected to other purposes, such as defence or supporting Ukraine.

While total Official Development Assistance (ODA) fell in 2024 by 7.1% in real terms compared  to 2023, that of the 22 DAC countries which are EU Member States fell by 8.6% in real terms. And the OECD DAC predicts that over 2024-2025, ODA levels could drop by as much as 17%. These are not just numbers and percentages. These are political decisions which will have an immediate and longer-term impact on millions of people’s lives.

I recently joined a webinar with Eurodad and Oxfam to discuss the OECD DAC’s release of 2024 aid figures. To say that we were all concerned by the massive cuts is an understatement. They come on top of the news of the closure of USAID. However, we were all in agreement that it is not just about the numbers. We expressed our ongoing frustration about how the OECD DAC – as a club of rich country donors – sets its own rules which are of course designed to suit donors’ interests. And on top of that, at least EU countries may not even comply fully with the spirit and letter of those rules. 

There’s a huge need to democratise the so-called ‘aid system’. To involve partner countries in the governance of and decision-making about aid – and especially about how aid is spent. The current system is a hangover from the colonial era and reproduces a neocolonial approach to aid, with the rich countries deciding how much gets spent where and on what. Fragile and conflict-affected countries are, as ever, losing out. As are people and countries which are the furthest down the Human Development Index (HDI). 

We discussed the fact that the EU (and other donor countries) owe partner countries not just trillions of dollars in unpaid aid dating back to the 1970s, but also reparations for exploiting their labour and natural resources. Jason Hickel, an economic anthropologist, has calculated that for every $1 entering partner countries as aid, $30 is extracted from them. So one can safely say that the Global South is subsidising the ‘development’ of the Global North!!

Looking Forward…

One can’t help but make the connections between the OECD’s predictions for aid cuts and the EU budget as we enter a period of long and often intense negotiations over the EU’s next 7-year budget, or Multi-Annual Financial Framework (MFF). CONCORD is engaging closely with policy-makers in the aim of realising the long-standing commitment of 0.7% of GNI for ODA, with a focus on human development and poverty and inequality reduction, so as to leave no one behind.

We’ve been urging the European Commission, in advance of the release of its proposal for the next MFF, not to merge the external action instruments and to make sure that there is a balance between flexibility and predictability in the budget. Like that the EU can ensure funding reaches those most in need while maintaining the ability to respond to emerging crises. On top of that, it will be crucial to secure money for human development – over and above any money dedicated to the Global Gateway, which is utterly inappropriate for supporting social priorities, as an important study has just recently shown.  In reality, a lot will depend on the stance of the European Parliament and the Member States in this regard. The hard work begins now…