Amid mounting global and regional turmoil, European Union institutions and member states are locked in high-stakes talks about the bloc’s next seven-year budget – its long-term spending plan for carrying out all its internal and external policies. 

Budgets reflect priorities. European Commission officials proposing the EU’s new spending blueprint acknowledge this fact: in their words, the plan is a “strategic statement of the Union’s collective political ambition”. While still under intense negotiation that will last at least until the end of the year, the €1.98 trillion draft proposal– which would govern all EU spending from 2028 to 2034 – has a strong outward-looking component, aimed at enhancing the EU’s global influence. At €200.3 billion, the foreign spending would represent the largest-ever EU investment in this domain – a rise of 75 per cent from the previous budget cycle. The jump in funding is not the only possible change. Under the draft budget, previously distinct foreign spending lines would be pooled in a Global Europe Instrument, covering everything from humanitarian aid and development assistance (including the Global Gateway, a European strategy for boosting investment in infrastructure and connectivity projects) to support for EU candidate countries. Previously, these items had dedicated funding streams. The idea is to increase flexibility in transferring funds among priority areas to ensure that the EU is best positioned to handle its most pressing geopolitical and economic concerns.

While the shift is understandable, many EU officials, member state diplomats and civil society groups worry that it could undercut conflict prevention funding and support for fragile states. They fear that greater flexibility may, in practice, divert money from those areas toward other, more overtly geopolitical priorities – such as building infrastructure in emerging economies or striking partnerships with strategically important countries, whether over energy, raw materials or migration cooperation. Conflict prevention and peacebuilding are not necessarily at odds with major construction or growth-enhancing business projects. But they do often require the sort of sustained specialised assistance that risks being sidelined. Preserving space for this support is crucial in a world of dwindling foreign aid. 

The European Commission is one of the few donors still investing substantially in conflict prevention and peacebuilding. Three major donors – the U.S., the EU and Germany – accounted for almost 70 per cent of peace spending in 2024 by members of the Development Assistance Committee, part of the Organization for Economic Cooperation and Development (OECD), whose members provide most global aid. The EU and its member states were the source of almost 55 per cent of the total. During President Donald Trump’s first administration, Europe emerged as a bigger donor in this space than the U.S., which until then had been by far the largest. While more recent OECD data is not yet available, the second Trump administration has axed peacebuilding support over the past year and Europe’s main donors have also made cuts. As a result, the European Commission’s support to conflict-hit countries is even more vital. 

Now is not the time to scale back support for conflict prevention and peacebuilding. With wars in Ukraine, the Middle East, Sudan and elsewhere, armed conflict – including in the EU’s neighbourhood – is on the rise. While peacemaking has become more challenging, Crisis Group, which receives European funding, regularly notes how EU support in this field still matters (select examples are laid out below). Changes in foreign aid could also shape how the bloc is perceived on the global stage at a moment when it is aiming to project itself as an “actor for peace and solidarity in the world” and a “reliable global partner”.

Russia’s war in Ukraine spurred an enormous increase in and reorientation of foreign aid across the continent. Moscow’s full-scale invasion of Ukraine and the ensuing war of attrition has heightened EU member states’ perceptions that they are vulnerable to attack, and that Ukraine’s defence is crucial for their own security. The EU and member states have therefore spent approximately €167 billion in providing military, economic, and humanitarian support to Ukraine, with another €90 billion committed. This assistance has been vital in helping Ukraine defend itself, keep its economy afloat and cope with the humanitarian crisis. At the same time, the early years of the war – in conjunction with other shocks such as the COVID-19 pandemic – stoked inflation and contributed to economic stagnation across Europe. 

The war on the EU’s doorstep and the changed security environment have also prompted member states to ramp up defence spending. Most have committed to a NATO spending target of 5 per cent of GDP, including via joint borrowing. Many member states have done so while cutting foreign aid. In 2025, seventeen member states cut their development assistance. Germany chopped its humanitarian aid in half in 2025, while that same year Paris reduced development spending by 39 per cent, trimming it further in 2026. Most governments do not say that the reductions in foreign aid are directly linked to increases in defence spending. That said, the UK (though not an EU member state) made the “arms-for-aid bargain” explicit ahead of Prime Minister Keir Starmer’s first trip to the White House after U.S. President Trump’s re-election.

At the same time, there is growing emphasis on border control and migration management in Europe (often, but not exclusively, driven by right and far-right parties), which has led to shifts in EU foreign aid. In 2024, the EU pared back development cooperation for 2025-2027 by €2 billion, while topping up funding for migration control to around €25.7 billion. Meanwhile, major donors such as the Netherlands (under its previous government) explained that they were cutting foreign aid in order to spend more on handling migration. Sweden has said its foreign assistance will be divided between addressing the root causes of migration and intercepting and voluntarily repatriating migrants.

The EU has also made major changes to its development portfolio. Most recently, it has turned away from country-specific development aid toward a regional approach, allowing for greater flexibility in allocating funding. Moving money around more easily within and among regions has led to big aid cuts for some countries: support for the Central African Republic, for example, dropped by about 73 per cent in 2025. The Commission is also doubling down on the Global Gateway initiative, which it launched in 2021 partly as a European response to China’s flagship Belt and Road Initiative. It finances high-visibility infrastructure projects in the digital, energy, transport, health and education sectors. 

In combination, these changes are chipping away at EU development assistance in poor, conflict-affected states and programs geared toward conflict prevention, peace and security. As an EU official put it to Crisis Group, Global Gateway has “sucked attention and funding out of traditional development aid”. In private, EU officials say the Global Gateway model is difficult to apply in highly fragile and conflict-affected countries, as these tend to lack the infrastructure, long-term stability and legal environment to make the investments viable. These obstacles are even more pronounced in non-democratic states, especially those that have undergone recent coups or other unconstitutional transfers of power, making direct cooperation with de facto authorities nearly impossible for the EU: cases in point include Myanmar, Sudan, Mali, Niger and Afghanistan. The result is a financing gap in precisely the places where instability is most acute. 

Furthermore, the European Commission gradually reduced the share of funding for peace, security, and governance in its official development assistance. Spending earmarked for peace and security in Africa, Asia and Latin America dropped from 25.5 to 19.5 per cent of total spending between 2021-2024 and 2025-2027. Other means of addressing drivers of conflict, such as the EU’s rapid response funds, remained largely unchanged, but the dedicated sums are much smaller.

The Commission proposal – the starting point for negotiations over the new EU budget – calls for a wholesale merger of all EU external financing streams into a Global Europe Instrument. This Instrument would combine development aid, humanitarian assistance, macro-financial assistance, foreign investment and funding aimed at preparing EU enlargement candidates for full-scale membership – as well as support for peace, security and conflict prevention – into one pot. (The exception would be support for Ukraine; given its critical importance for the EU, this would be largely covered through separate funding according to current plans.) 

These funding lines were previously separated to protect money for strategic priorities from being reassigned to cover other short-term necessities. According to the European Commission’s proposal, this newly merged fund would be disaggregated into seven streams: the Americas; the Asia Pacific; Europe; the Middle East and North Africa; sub-Saharan Africa; a thematic “global” pillar; and a cushion focused on rapid response funding and emerging threats. To allow for greater flexibility within these pillars, the Commission proposal removes many binding spending targets, such as on gender equality, that had previously been enshrined in the budget.

The European Commission argues that these changes are necessary because the current budget is too rigid to respond properly to crises. By allowing for more flexibility, proponents of this approach argue, it will be easier for the EU to allocate funds to respond to changing priorities, especially in an “era of conflict and confrontation”. They argue that it is impossible to budget in advance for unforeseen needs or opportunities in places such as Syria, and that the reform will sharpen the EU’s impact. Given today’s global and regional volatility, the case for more elasticity is hard to refute. 

But representatives of humanitarian, development and peacebuilding civil society groups are worried. They argue that each foreign funding instrument “serves a distinct and crucial purpose” and that merging them could lead to a loss of predictable, long-term financing that is essential to tackle underlying drivers of conflict and insecurity. Conflict prevention and peacebuilding organisations also raise concerns that the merger could allow funding for peace, security and conflict prevention to be shifted between budget lines in service of state or political interests like migration control or border management. As a result, conflict prevention and peacebuilding efforts could get short shrift. Current funding trends, as noted above, appear to point precisely in that direction.

Several EU officials and national diplomats share these concerns. One official said effective conflict prevention and crisis response require flexibility – but warned that this funding should not be pitted against spending on other priorities, which could leave it vulnerable to being cut or crowded out. Privately, some member state officials also worry that the new approach could put the squeeze on longer-term preventive work. 

It is clear that the global aid system needs an overhaul. A long-standing argument against the foreign aid machinery as it has developed over recent decades is that it lets governments shirk domestic responsibilities. Moreover, emerging economies are increasingly pushing back against aid offered on specific conditions, calling instead for investment, economic growth stimuli and genuine partnerships. Some local organisations and local academia see aid as a post-colonial legacy that fosters dependency; others accuse the West of using aid to impose liberal values. Even inside the foreign aid system, humanitarian and development practitioners, such as international non-governmental organisations, point out that parts of the system do indeed require genuine reform to reduce inefficiency and “shift (…) power and resources closer to communities”. Many of these and other criticisms are at least partly valid. Yet, it is important that they do not entirely overshadow some of the vital work that foreign aid bankrolls. In fragile and conflict-affected settings – where institutions are often weak, revenues scarce and violence recurrent – bodies such as the EUoften remain a critical external source of support for hard-pressed communities. 

The EU does important work in this space. Its humanitarian aid – totalling about €1.9 billion in 2025 – helps safeguard the lives of the most vulnerable, including in today’s major conflicts, by providing emergency help in obtaining food, water and health care, among other things. Some of its long-term development assistance is used to alleviate food insecurity; poverty and inequality; resource scarcity; and lack of basic services in health care or education. In fragile and conflict-affected states, which are home to nearly one billion people, this support is not just about alleviating human suffering. It can help mitigate causes of conflict. Without it, basic services may falter, grievances deepen and the risk of instability spilling across borders or greater numbers of people leaving grow. 

In most of the roughly 40 countries that fall into this category – for example, Ukraine, Afghanistan, Syria, Yemen and the Democratic Republic of Congo (DRC) – the EU (sometimes together with its member states) has been among the leading humanitarian donors. With U.S. cuts, it is emerging as an even more prominent contributor in many of these places, including via its support as a leading donor to the UN system.

Through its Peace, Stability and Conflict Prevention funding, the EU also underwrites initiatives that help mitigate violence. Such efforts include mediation and dialogue between states and across domestic political divides, from the grassroots to the national level. They also extend to electoral assistance; peace education; sensitisation campaigns about children in armed conflict and sexual and gender-based violence; demining; demobilisation and reintegration of members of non-state armed groups; and support for civil society and media. While such work has become more difficult in many places, it remains vital, and EU-sponsored programming has helped reduce conflict risks and ameliorate its ill effects. 

There are many places where such support has made a difference. In Kenya, a critical point of stability in an increasingly volatile East Africa, unrest around a highly contested election in 2007 resulted in more than 1,000 deaths. For subsequent votes in 2017 and 2022, Brussels deployed electoral observation missions, engaged in political dialogue and funded prevention initiatives to help stave off election-related violence. Several factors helped make those polls more peaceful, but EU support played a role. In Ghana, EU-supported mediation in 2024 succeeded in encouraging the two main political parties to commit publicly to promoting peace in six northern constituencies that were at risk of conflict fuelled by the electoral campaign. 

Beyond elections, Crisis Group has documented the impact of EU-backed initiatives in many countries, including, for example, Mozambique, Myanmar and the Central African Republic. One case of major long-term investment is the EU’s funding to help consolidate the Bangsamoro peace process in the Philippines, which remains one of the few instances where a negotiated settlement has held anywhere in the world in the last decade. The EU has been a major peacebuilding partner for Colombia, giving support to many parts of the landmark 2016 peace agreement, including the disarmament and reintegration into civilian life of former members of the Revolutionary Armed Forces of Colombia (FARC). In Myanmar, where the EU delivers assistance through civil society groups, NGOs and international organisations rather than the authorities, its support is providing vital food, health care, shelter and emergency education to conflict-affected communities, while sustaining livelihoods and basic services in areas beyond state control.

The EU also points to examples where its mediation support helped halt cycles of violence. In parts of West Africa, for instance, it has sought to prevent agro-pastoral conflicts that are often exploited by militant groups to fuel instability. The EU backed a mix of initiatives in eastern Mauritania – from the pre-emptive distribution of cattle feed to the development of local charters for resource management – to help defuse tensions between long-time residents and Malian refugees during the pastoral lean season, when conflicts tend to intensify. EU has also given support to local mediators – in particular, women and youth – in Mauritania and neighbouring countries. With EU backing, interfaith platforms such as the World Council of Churches helped secure the release of kidnapped individuals in the aftermath of major violence in Suweida, Syria in July 2025, one of the deadliest flare-ups in the country since the fall of former President Bashar al-Assad.

With massive U.S. cuts to programs promoting health and gender equality – in particular, sexual and reproductive health and responses to gender-based violence – the EU’s role in these areas will be even more crucial, especially in conflict-affected states. The bloc has made large political and financial commitments, adopting Gender Action Plans that have turned promotion of gender equality into a priority. It has also committed to ensuring that 85 per cent of all new EU external assistance contributes to gender equality, a goal it reached in early 2025. The EU has accordingly been able to provide more robust support (such as medical, psychological and socio-economic assistance) to women in conflict-hit countries such as the DRC, where insecurity, scarcity of health care and high rates of sexual violence make such services crucial. In April, the EU’s humanitarian arm recognised that levels of sexual violence have reached unprecedented levels in recent years, making these services even more essential at a time when U.S. aid cuts are shuttering clinics and other safe havens.

Through their work on mediation and peacebuilding, EU institutions have developed specific expertise and know-how in this area. With conflict analyses mandatory when drafting funding plans for fragile and war-torn settings, the EU has also shown its commitment to reducing the risk that foreign aid ends up making matters worse.

Addressing conflicts before they escalate remains far more effective than allowing them to spiral out of control and trying to make peace in the aftermath. Investing in mediation and addressing causes of conflict remain important parts of a preventive approach. At a moment when the number of armed conflicts has reached its highest level since World War II, the number of civilian casualties has risen sharply and the global conflict landscape is becoming more complex, the investment of states and other bodies around the globe – including in Europe – in peacemaking efforts is ever more vital. It is true that some major wars appear impervious to the efforts of peacemakers and mediated settlements to wars are harder to reach in today’s factious world. But vital diplomacy still takes place on today’s battlefields: negotiating access for aid delivery, establishing back channels between parties or their outside patrons, helping ensure that conflicts do not spread. Abandoning them altogether would allow today’s burgeoning conflicts to expand and make an already unstable world more perilous. 

Even in the most intractable crises, preventive work on the ground remains possible and essential. Shoring up the resilience of countries that have not yet collapsed in war-torn regions, which is the focus of a great deal of European aid, is increasingly important. It helps manage spillover and prevent wars in one country from igniting wider conflagrations.

As national budgets get tighter, a growing number of European politicians have decided to cut foreign spending in part to focus on defence. Some leaders, especially on the hard right, are calling for further cuts. A 2024 report by a member of the French National Assembly, for instance, asserted that the country’s “illegible, expensive and ineffective” development assistance provided insufficient domestic benefits. Other arguments for reduced aid include the need to focus on domestic problems amid severe fiscal pressures. The Trump administration’s drastic and abrupt spending slashes have paved the way for European governments to double down on their own cuts. As the chair of the European Parliament’s development committee has underlined: “There is no longer any political cost to cutting development and humanitarian budgets”.

Nonetheless, there is still a sense among EU lawmakers and many member states that EU foreign spending in general, and investment in humanitarian aid, conflict prevention and peacebuilding in particular, can serve the bloc’s fundamental interests. An overview of the first year of the current European Commission stresses that the EU’s role as “the largest donor of international aid in the world and a leading humanitarian donor” has become more important as other donors have scaled back their funding. EU leaders also recognise that it is in Europe’s interest to shore up a system of international cooperation, underpinned by the UN, that is under immense strain. The European Parliament is even pushing to substantially increase funding for the Global Europe Instrument, citing, among other things, “an unprecedented number of crises, conflicts and overall fragilities” and the importance of strengthening the EU’s role as a global actor in an increasingly complex geopolitical environment. Several EU member states that are cutting foreign spending are in parallel lobbying for more money for the EU’s Global Europe Instrument, in acknowledgement of the importance of pooling external funding to promote the EU’s global interests.

If only out of narrow self-interest, the EU has strong reasons to continue funding aimed at preventing, mitigating and resolving conflict. Instability in the EU’s neighbourhood and farther afield increase economic, security, energy and migratory pressures on the bloc. Poorly governed, unstable and violent spaces in the EU’s periphery, in particular, can give non-state armed groups, organised criminal organisations and EU strategic adversaries such as Russia room to widen their footprint. Even conflict zones that appear distant can have direct repercussions for Europe’s security and economic interests. Wars in the Gulf or the Horn of Africa not only drive regional instability but disrupt strategic trade routes, such as across the Red Sea, and directly raise the cost of living in Europe. These risks are set to feature prominently in the sweeping threat assessment now under way across the EU and its member states and in the bloc’s new Security Strategy that is also in the works. 

There are also sound financial reasons to bolster investment in peace. According to an International Monetary Fund study from December 2024, each U.S. dollar invested in prevention in countries that have recently experienced violence could save up to $103 in the long run. At the same time, this expenditure forms a miniscule part of the EU annual budget: according to Crisis Group’s calculations, the EU budgeted 0.1 per cent of that budget, or €1.73 billion, on activities related to peace, stability and conflict prevention, rapid response, and emerging challenges as well as peace mediation services in 2025. This amount is negligible compared to the €150 billion that the European Commission’s newly established SAFE program is planning to raise for security and defence investment between 2024 and 2027, or the €300 billion mobilised thus far for the Global Gateway initiative. 

Much remains to be done to improve the aid system and mould it to the real needs of developing countries. Given mounting fiscal constraints and geopolitical turbulence, it is also understandable that European institutions and member states are reassessing how the EU spends taxpayer money. Yet the budget currently under discussion risks affecting the EU’s ability to address conflict risks at a time when violence is on the rise and other donor funding is drying up. The consequences are difficult to predict, but they could place people in many countries in greater peril and expose the EU to further buffeting from waves of global and regional instability. Negotiations across EU member states and institutions will continue throughout 2026, and difficult trade-offs between different spending priorities lie ahead. As talks advance, and the EU embarks on more flexible and interest-driven foreign spending, the bloc should remain ambitious in its foreign spending plans, and keep a number of core principles in mind.

First, for all the reasons mentioned above the EU should ensure that the new budget supports long-term conflict prevention and peacebuilding work. This would also help to preserve the know-how developed over the last decade. In parallel, the EU should expand its global and regional funding for rapid responses in areas of peace, mediation and conflict prevention. Given the risk that these comparatively small amounts of money are used up by other priorities, the EU should recognise their importance in the way the future budget is managed and make sure it protects these funding streams, ideally by ring-fencing them. 

Secondly, the EU should ensure that assistance for fragile and conflict-affected states, including monies provided in cooperation with multilateral organisations, does not fall through the cracks. There are valid questions about the usefulness of parts of the international development aid system, especially in middle-income countries. But external assistance (including climate adaptation and mitigation financing) remains essential to support the most vulnerable in countries wracked by war, where states are rarely able to meet public needs, insecurity deters foreign investment and conflict risks cannot be handled by emergency relief or infrastructure investments alone.

Thirdly, the EU should also not walk back its gender commitments. It should maintain its goal of ensuring that 85 per cent of EU external assistance across sectors integrates a gender perspective and contributes to gender equality. Staying the course is important not only to keep supporting women and girls in conflict zones, but also to avoid the harmful political signal that would be sent by reneging on previous promises when other global powers are withdrawing from international gender equality efforts. 

Fourthly, the EU should maintain its humanitarian funding commitments. According to one analysis, in nineteen of 34 of the world’s major humanitarian crises – including in South Sudan, the DRC and Haiti – international funding does not come close to meeting the level of need. The EU should keep these funds clearly separate from other financing streams to ensure that humanitarian aid remains anchored in the core principles of humanity, impartiality, neutrality and independence. At a time when international law is systematically violated in many conflicts, and humanitarian workers are at growing risk of being killed, detained and injured, it is essential that the EU uphold humanitarian assistance. 

Lastly, the EU should ensure that all its work abroad takes conflict risks into account. As the EU expands the range of its support, it should maintain the requirement to include conflict analysis within its evolving approach to foreign spending. The EU’s Global Gateway program could in principle foster peace, as European Commission President Ursula von der Leyen herself has argued in the case of the South Caucasus. Indeed, in some places, better infrastructure or trade corridors might encourage cooperation across conflict fault lines. That said, poorly designed capital-intensive projects could exacerbate tensions or inequalities. As the EU recasts foreign aid, it should both protect peace funding and look to manage any potential conflict risks along the new path it is embarking on.