Negotiations over the European Union’s (EU) next long-term budget rarely make the news. But this time, they should because the EU institutions are locked in a fight over how—and why—Europe acts beyond its borders. And hundreds of billions of euros are at stake.
Last summer, the European Commission proposed merging three existing instruments for external spending—on development cooperation, humanitarian aid and pre-accession assistance—to create a single external action instrument. This new instrument is called Global Europe, and has a proposed envelope of EUR 200.3 billion, nearly double the current external action budget. As draft opinions and amendments are shared within the European Parliament and Council of the EU (i.e., the 27 Member States), it is becoming clear that while there is broad agreement on the size of the budget, there is far less agreement on what the money should be for. At the outset of the negotiations, we warned that the core question would be this: will Global Europe reinforce the EU’s role as a long-term development partner or will it formalise a more transactional, interest-driven model of external action?
The headline figures: broad support but cuts remain likely
So far, the European Parliament and the Council broadly support the headline figures for the EU’s external action budget. The broad envelope includes a EUR 25 billion baseline for humanitarian aid and ringfenced support for Ukraine. There is a growing recognition in European capitals that, in a more unstable world, external action is not peripheral but a central pillar of Europe’s security and economic strategy.
In the European Parliament, in particular, development cooperation is increasingly framed not only as a moral obligation but as a strategic investment. Supporting stability, economic growth and resilience in partner countries is seen as directly linked to European security interests.
However, negotiations over the Multiannual Financial Framework (MFF) are notoriously protracted and difficult, and history urges caution. About 20 percent has typically been shaved off the initial European Commission proposals. And with defence spendings rising across Europe and fiscal pressures mounting, everyone is quietly bracing for the possibility that Global Europe’s final budget may be substantially reduced.
Governance: flexibility versus oversight
In a previous blog on the proposed Global Europe instrument, we predicted that governance and oversight of the instrument would emerge as a likely fault line. That prediction has largely borne out.
The European Commission argues that a more flexible instrument is essential to respond quickly to crises and shifting geopolitical priorities. Both the European Parliament and the Council are wary of expanding the Commission’s discretionary powers. Their concern is not with flexibility per se, but with the risk that flexibility becomes politically steered rather than operationally necessary.
One contentious issue is the treatment of decommitted funds (i.e., money allocated but not spent). Under the Commission’s proposal, these funds would return to the overall EU budget and could then be redirected towards internal priorities. Parliament and Council maintain that such funds should remain within the external action heading to preserve political intent and ensure accountability.
Similar concerns surround the EUR 14.8 billion unallocated emergency cushion designed to provide financial flexibility for unforeseen crises, emerging challenges, or new priorities between. While few dispute the need for rapid crisis response, Member States want greater oversight over how these reserves are deployed.
Behind these technical debates lie deeper questions about transparency, democratic control and how success in development should be measured. The European Parliament has warned in particular against the proposed performance framework that relies heavily on short-term, output-based indicators, which often fail to capture the long-term and structural nature of development outcomes.
Migration conditionality remains a heated debate
Another heated issue is the use of development funding as leverage for migration cooperation.
Several Member States support re-introducing a migration spending target, similar to the indicative 10 percent target for migration-related actions in the current development instrument, covering management, root causes, and forced displacement. A key focus area has included border management in partner countries. More broadly, negotiations reveal a growing tendency to link development assistance to partner countries’ cooperation on returns, readmission and border control.
The Commission defends this approach as part of a wider strategy aligning external financing with geopolitical priorities, including the possibility of suspending payments where partners fail to cooperation on migration. Several Members of the European Parliament’s Development Committee have pushed back, arguing that such conditionality risks addressing symptoms rather than causes. Sustainable reductions in migration pressures, they argue, depend on job creation, economic transformation and long-term development in partner countries.
There is also a tension between this stated objective and some elements of the Global Europe proposal itself. Restrictions on procurement, particularly in large infrastructure initiatives linked to the Global Gateway strategy, could limit opportunities for local labour markets and companies, potentially weakening the very economic development needed to address migration drivers.
European interests versus poverty eradication
Perhaps the most fundamental debate concerns the purpose of the EU’s external action. The Commission has been explicit that the Global Europe Instrument is designed in part to advance the Global Gateway agenda and support Europe’s geopolitical and economic interests. This includes enabling direct grants to European companies and strengthening links with European export credit agencies to deliver visible economic and strategic return to the EU. The European Investment Bank, the EU’s lending arm, is increasingly aligning its external operations with these strategic objectives.
This marks a significant shift. The European Parliament's Development Committee and many development stakeholders point to the EU treaties, which establish poverty eradication as the primary objective of EU development cooperation. The tension here is not new, but it is becoming sharper. As geopolitical competition intensifies, development policy is increasingly expected to deliver visible economic and strategic returns for Europe itself. Simply reaffirming development principles will not be enough to counter this trend.
What is needed instead is a clearer strategic framework that defines how the EU can pursue its interests while still building genuinely equitable partnerships that serve both partner country and European priorities. Without such a balance, there is a risk that the EU could gradually lose credibility as a major development actor.
Simplification in theory, complexity in practice
The Commission presents the Global Europe instrument as a simplification of external financing, merging three instruments into one, while preserving policy specificities. Parliament is less convinced. Concerns are growing about potential duplication between Global Gateway structures, investment hubs, “Team Europe” initiatives and emerging “Team National” approaches. Questions remain about coordination, delivery timelines and how these multiple layers will work together in practice.
Next steps in the Global Europe negotiations
Negotiations are now moving from broad political positioning to detailed amendments and interinstitutional bargaining. Amendments are expected in early May, a parliamentary vote is scheduled for September, and negotiations between the institutions will begin after the October plenary as part of the wider MFF process. By that stage, the central questions should be clearer: not just how much the EU will spend on external action, but what kind of global actor it intends to be.
Will Global Europe preserve the EU’s identity as a long-term development partner, committed to poverty reduction and equitable growth? Or will it mark a turning point, redefining development spending as a tool of strategic geoeconomics? That answer will shape not only the EU’s budget, but its role in the world for years to come.
