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The European Union (EU) is rethinking its foreign aid programme, aiming to better align it with broader foreign policy goals.
This comes as the United States makes its own significant changes to how it manages foreign aid, particularly under the leadership of former President Donald Trump, who had already pushed for a major overhaul of U.S. international aid.
The EU faces growing pressures, including increased defense spending due to the war in Ukraine and disagreements with the U.S. over international policies. As a result, European leaders are now focused on reshaping the way they allocate aid, with the goal of reinforcing relationships with key global partners, securing access to important raw materials, and improving migration management.
The EU’s budget, which is usually about 1% of its economic output, is already under strain due to the demands of the green transition and enhanced defense capabilities. The European Commission is expected to unveil its updated foreign aid priorities in the coming weeks, along with new proposals for its seven-year budget covering the period from 2028 to 2034. This shift is expected to place greater emphasis on strengthening alliances with like-minded nations that share similar values and geopolitical interests.
At the same time, the U.S. is undergoing its own shift in foreign aid priorities. Under the Trump administration, there were growing concerns about waste and fraud within the U.S. Agency for International Development (USAID).
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Although foreign aid accounted for only around 1% of the U.S. federal budget, the changes were impactful. Recently, USAID was moved under the control of the U.S. State Department, signaling a broader change in approach.
Despite these shifts, USAID continues to play a critical role in supporting Ukraine, where it has provided billions of dollars in humanitarian and development assistance since Russia’s invasion in February 2022. This includes rebuilding schools, repairing critical infrastructure, and supporting civil society initiatives.
These developments in both the EU and the U.S. reflect a shift in global priorities, with a growing focus on national security, economic resources, and migration. As these major powers recalibrate their foreign aid strategies, they are seeking ways to ensure that aid is better aligned with their geopolitical goals, while still addressing the challenges of global development.
For the EU, this new direction will require careful balancing, maintaining long-standing support for global development while adjusting to the changing geopolitical landscape.
