EU Development Policy in 2021: Greater than the Sum of Its Parts?

January 12, 2021


2020 was a challenging year for Jutta Urpilainen, the European Commissioner for International Partnerships. From the design of a new strategy for Africa to the negotiations of the Post-Cotonou agreement with African, Caribbean, and Pacific countries, all against the backdrop of a global pandemic, her first year in office has represented both a test for European Union (EU) international solidarity and an obstacle to progress on development priorities.

In this blog, we look back at the EU’s international development performance and assess the extent to which it has lived up to the EU’s pledge to be a reliable international partner. We also look forward and set out our thoughts on where the EU development portfolio needs to go in 2021. While there have been some successes and worthwhile initiatives launched by the European Commission, not least in its attempt to effectively coordinate European actors to mitigate the impact of COVID-19, there is still a long, winding road ahead towards the EU’s stated ambition of being an impactful geopolitical heavyweight. And the Commission’s lack of transparency is hindering its progress. In 2020, virtual Commission press conferences following meetings of foreign and development ministers became the exception rather than the norm.

The emergence of “Team Europe”: A veil of cooperation or real consolidation?

In 2020 we saw the emergence of “Team Europe,” a variable-geometry collective of EU institutions, European member states, and European development finance institutions. At the onset of the crisis, Team Europe was quick off the mark to commit a whopping €38.5 billion to help the most vulnerable countries deal with the immediate health effect of the pandemic as well as its social and economic consequences. Yet behind this monumental figure, two important caveats are worth mentioning. Firstly, as COVID-19 hit in the last year of the EU’s budget cycle, the bulk of the finance consisted of existing resources that were reallocated, inevitably resulting in a loss of funding for non-COVID-related programmes. Furthermore, a sluggish disbursement rate meant that only half the committed amount had been spent up to October. Secondly, with no common framework to coordinate responses, (or mechanism for how it actually operates in partner countries), Team Europe has been, and continues to be, somewhat of a black box. It is impossible to determine whether Team Europe has swung the pendulum towards a consolidated model of like-minded actors pulling in the same direction and being steered by the European Commission or whether it is merely a convenient branding exercise to enhance international visibility with little substance behind the veil.

Even in areas where there was broad agreement within the EU, such as on gender and women’s empowerment, the Commission’s quest for greater consolidation amongst the member states was in vain. In November, EU High Representative Borrell and Commissioner Urpilainen jointly presented the EU’s new Action Plan on Gender Equality and Women’s Empowerment in External Relations 2020–2025 (GAP III). The plan put forward an ambitious target of 85 percent of all new actions throughout external relations to contribute to gender equality and women’s empowerment by 2025. Yet, Bulgaria, Hungary, and Poland refused to sign up to the plan, throwing yet another spanner in the works towards consolidation.

However, the emerging development agenda suggests that the case for consolidation in European development cooperation may be strengthening, at least among like-minded member states. Spain has already expressed its willingness to eventually fully integrate its development activities at the EU level. In 2021, the EU urgently needs to work out how its institutions, including through joint action between them and Team Europe, can demonstrate that they have sufficient purpose, capacity, agility, and speed of action for consolidation to become attractive across the board. Leveraging a wider range of institutions like the European Investment Bank and the European Bank for Reconstruction and Development, and variable-geometry partnerships of its common institutions and clusters of member states, plus like-minded associates including the UK, Team Europe can be, and needs to be, much more than the sum of its parts.

A telling example of the form Team Europe could take in practice was the launch of the Digital for Development (D4D) Hub. Several member states joined forces with the European Commission to increase investment in the digital sector in partner countries building on their respective comparative advantages. It remains to be seen whether and how this approach will be replicated in 2021.

From “international cooperation” to “international partnerships”: A PR exercise or a profound shift in the EU’s approach?

The European Commission proudly announced that Jutta Urpilainen was to become the first European Commissioner for International Partnerships, a post previously known as European Commissioner for International Cooperation and Development. At the heart of this name change was the ambition to move to a more balanced and sustainable approach in dealing with partner countries. A first opportunity to live up to this commitment was the bloc’s strategy with Africa presented in March. It focused on building five partnerships around (i) green transition and energy access, (ii) digital transformation, (iii) growth and jobs, (iv) peace and governance, and (v) migration and mobility. However, hopes for a profound reset of the relationship between the two continents faded over the ensuing months. The postponement of the EU-African Union summit planned for October and the cancellation of a virtual mini-summit in December meant that momentum towards a renewed and balanced partnership between Europe and Africa was lost. And yet again, there was a striking lack of communication and transparency around the reasons for the delay and the proposals for next steps.

While closer cooperation with both African countries and the African Union is a primary goal of EU foreign and development policy, the partnership will need to be reinvigorated in 2021 with concrete steps to guarantee Africa’s ownership of any deal. COVID-19 has changed the premise behind the EU strategy with Africa, requiring a substantive revision of the content and scale of the partnership to meet the challenge. The strategy needs to take account of the disruption caused by the current synchronised recession harming Africa disproportionately. It urgently needs to address ways of mobilising additional resources to finance the recovery in Africa. Other key areas for greater attention include major long-term investment in African education systems to equip new generations of school leavers with the skills needed to navigate digital work opportunities as well as new strategies for long-term investment in youth employment.

The second important partnership for the EU has been the Post-Cotonou agreement with the African, Caribbean and Pacific states. Expiring in 2020, the agreement covers political and economic relations between the two groups of countries. A political deal was reached by all negotiating parties in December 2020. However, once again, we find ourselves in the dark as little has been revealed about the actual content of the agreement.

The new consolidated development instrument: Wherefore art thou?

2020 marked an unprecedented EU agreement on a colossal €1.82 trillion (all amount in 2018 prices) to be spent over the next seven years. Of the €98.4 billion allocated to EU external action, €71.8 billion was set aside for the EU’s primary instrument for international development, the Neighbourhood, Development and International Cooperation Instrument (NDICI), which merges and simplifies an array of instruments for external action under the previous Multiannual Financial Framework. The instrument is almost entirely geographically focused—three-quarters of the overall amount is ringfenced for geographic programmes, with less than a quarter left for thematic priorities. Although the Commission earmarks around 20 percent of its development aid for human development programmes, previously most of the spending went to activities promoting economic growth. From the geographic envelope will emerge the European Fund for Sustainable Development + (EFSD+) and the External Action Guarantee, aimed at supporting financial investments and social and economic sustainable development in partner countries. However, neither investment windows nor earmarked amounts have been specified. And no targets have been set. The risk is that without any clear priority steer from the EU, the disproportionate shift in European support away from human development towards economic and infrastructure investment may be exacerbated. Only 3.3 percent of the €3.1 billion contribution to EU blending projects and only one guarantee out of 28 has, to date, been allocated to human capital. But while a political agreement has been reached on the NDICI, at the time of writing, the details of the rules governing the instrument have yet to be disclosed although the text is expected to soon be officially adopted by the European Parliament and the Council.

In the wake of the pandemic, as the European Commission radically ramps up its use of budget support, blended finance, and guarantees, it needs to tighten the reins and set out its policy priorities and targets for its external spending and investment.

As 2021 continues to unfold and the longer-term repercussions of the pandemic and the economic crisis become ever more apparent, it is likely that Commissioner Urpilainen and her team will continue to face huge challenges which will become unmanageable if Team Europe fails to speak and act coherently. Achieving this coherence remains Europe’s core challenge in being a leading geopolitical actor and in successfully providing global public goods in a world that desperately needs them.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.