Can the European Commission Save Development and Democracy after USAID Cuts?

With the United States having slashed its global aid budget, European civil society organisations are calling on the EU to step into the breach. But analysts warn that the Commission's new spending framework may not be up to the task.

Nongovernmental and civil society organisations across Europe, many coping with drastic cuts to funding they had previously received from the United States Agency for International Development (USAID), are pressing the European Commission to step in with urgently-needed replacement funding. More specifically, they want the EC to show flexibility in its upcoming seven-year budget, the Multiannual Financial Framework (MFF), in order to uphold democratic values and meet growing humanitarian needs.

Until last year, USAID was the world's largest single distributor of development aid, spending nearly $50 billion annually. This included substantial sums channelled to organisations across Europe for projects both within the continent and overseas. The MFF is the European Commission's main budgetary tool for distributing aid and setting spending priorities across the 27-member bloc over a seven-year cycle.

EC funded humanitarian response.

A New Programme, But Not New Money

For the first time in the new 2028–2034 MFF, the Commission is creating AgoraEU, a new programme designed to support culture, media, civil society, and democratic values across Europe. This merges two existing funding streams, Creative Europe and the Citizens, Equality, Rights and Values (CERV) programme into a single framework, with a proposed budget of approximately €8.6 billion.

The proposed new funding represents roughly double the combined amount of its predecessors, although critics note that it does not inject major fresh money into the system so much as streamline how existing resources are managed.

Civil Society Europe, a network of 27 European civil society organisations (CSOs), has welcomed the creation of AgoraEU but is also pushing for a larger direct role in designing programmes and accessing funding, particularly to counter threats to European democracy. In a letter to European Commission President Ursula von der Leyen, the coalition pointed to the scale of foreign interference in Europe's information space:

Russian undermining of credible information is a huge problem

"Authoritarian actors have simultaneously increased investment in influence operations. Russia's federal budget allocated approximately 120 billion roubles (around €1.4 billion at the time) to mass media in 2021, with subsequent budget laws indicating further increases in state-supported information activities. In 2024, significant additional resources were directed to patriotic films, youth festivals and related cultural initiatives aimed at reinforcing official narratives. China has likewise expanded its footprint through strategic investments and influence operations."

Support for credible and trusted journalism is an indispensible part of democracy

European Union

Journalism in the Crosshairs

Maja Sever, President of the European Federation of Journalists, is calling on the Commission to provide dedicated, ring-fenced funding for independent media. "In days when media pressure, especially on independent media, is higher and higher, there is no real answer as to how to finance journalism," she says. "European forums such as Agora are not just important but crucial, even for the survival of independent professional journalism." (See Global Geneva's three-series on the state of journalism today)

Sever stresses that while several European media outlets were forced to close when USAID funding dried up, USAID money had mainly supported capacity-building, such as training, institutional development, and the like. She wants the EU to go further and finance daily operations for investigative and independent outlets, arguing that without sustained operational funding, editorial independence becomes impossible to maintain.

Wars and military budgets are severely undermining humanitarian, development and media responses.

Global Europe: The EU's Main Tool for Aid Beyond Its Borders

Within the MFF, the Global Europe instrument is the Commission's primary vehicle for spending on humanitarian aid, development cooperation, democracy support, the rule of law, and media development beyond EU borders. Under the Commission's current proposal for the 2028–2034 period, the instrument carries a budget of approximately €200 billion, a substantial increase on the previous cycle. Of this, an indicative €25 billion has been earmarked for humanitarian aid.

Yet NGOs, CSOs, and activists say the proposal raises serious concerns on three fronts, notably areas where they fear Europe may fail to fill the democratic and humanitarian vacuum left by the United States.

USAID international aid cuts in 2025 and 2026

Concern One: Where Does the Money Actually Go?

The first concern is how the Commission distributes and manages humanitarian funds. Critics argue that most money flows to the institutions of EU Member States rather than directly to partners in the countries where aid is needed.

Concord, a coalition of roughly 40 European development NGOs, analysed the Commission's Neighbourhood, Development and International Cooperation Instrument, Global Europe (NDICI–Global Europe), and found that Member States hold disproportionate sway over how money is spent.

"Key findings indicate that indirect management, now accounting for 62% of the reviewed budget, concentrates decision-making authority within pillar-assessed organisations, creating structural barriers to direct CSO participation. Explicit CSO allocations represent just 10% of reviewed funding, while 70% of the budget carries no traceable data on downstream recipients," Concord reported.

The current MFF draft still does not propose a fixed financial allocation for civil society organisations, which can receive funds either as implementing partners or to run their own projects. Historically, their share has hovered around 5% of the aid budget.

Concern Two: From Grants to Loans - Who Bears the Risk?

The second objection concerns a fundamental shift in how the EU finances development: a move away from straightforward grants towards a mixed model of grants, loans, and private-sector investment guarantees, commonly referred to as "blended finance."

"The proposed Global Europe Instrument (GEI) for the EU's 2028–2034 budget signals a major shift in EU external action … [I]t risks deepening the move towards investment-driven approaches that prioritise private finance and EU economic interests," warns Concord.

NGOs and CSOs are demanding that a guaranteed high percentage of EU aid be distributed as grants, not loans, and not made subject to the commercial interests of private investors. In principle, the idea has strategic merit at a time when European governments are under pressure to spend more on defence and reduce reliance on the United States.

In practice, analysts warn that many recipient countries, particularly those in sub-Saharan Africa, lack the institutional infrastructure to service loans or attract private investment on market terms.

"The focus on the private sector could have a distributive impact if it follows the market model: if you open resources much more to the private sector through loans and guarantees, you are automatically targeting more middle-income and stronger countries with more diversified economic structures," says Philippe Van Damme, a former EU Ambassador and Fellow at the European Centre for Development Policy Management (ECDPM).

"That would be to the detriment of the Least Developed Countries (LDCs) and countries in situations of fragility, where it is more difficult to attract investment," he maintains.

Concern Three: Is Europe Drifting from Its Core Mandate?

The deepest anxiety among NGOs, CSOs, and development analysts is that the Commission is steadily drifting from its founding mandate, even as it seeks to consolidate programmes, improve efficiency, and find creative ways to fund them.

"Thematically, we have observed a gradual shift in EU and Member States' funding priorities away from long-term poverty and inequality reduction and rights-based development towards geopolitical, security-driven objectives and migration management," says Laia Aycart, Policy and Advocacy Adviser at Concord.

Van Damme echoes the concern. He argues that the Commission's growing emphasis on geopolitics, counter-terrorism, and irregular migration control is most heavily concentrated in fragile states, precisely the countries least able to manage loans or attract private investors.

"We have been warning the Commission: if you have geopolitical priorities including security, the fight against terrorism, and irregular migration, those are hugely concentrated on fragile states...in the Sahel and West and Central-Eastern Africa...where governments do not have the infrastructure for private-sector grants-and-loans mechanisms."

He adds a pointed legal reminder: under the EU Treaty, poverty reduction remains the primary mandate of European development policy.

An effective response to needs? The Blunt Answer is No

Will the European Commission be able to adequately replace what USAID has cut providing CSOs and NGOs with the means to respond to rising democratic and humanitarian needs?

"The blunt answer is no. There is no political interest among the Member States to compensate for the US withdrawal from these sectors," says Van Damme.

That verdict carries particular weight at a moment when the United States has stepped back from its decades-long role as the guarantor of global development and democracy promotion, and is now actively seek to destroy effective global aid measures, including dealing with climate change.

The EU's response of more bureaucratic consolidation, more private-sector leverage, and an increasingly geopolitical frame may not be enough to fill the void.

Peyman is an American journalist and writer, who has also served as a UN communications officer. He is author of two current affairs fictions: The Age of Intolerance and The Misfit Radical.