The European Union (EU) is redesigning how it finances development around the world. The proposed Global Europe Instrument will shape where EU money goes, who benefits, and what strings, if any, are attached. With the Foreign Affairs Council meeting on 18 May, this is the moment to ask whether the proposal is fit for purpose.
There is a lot to like within the proposal. It rightly recognises that development cooperation must engage with infrastructure, private investment, and geopolitical realities. Its flexibility provisions respond to a genuinely more unpredictable world. But these strengths sit alongside some serious structural problems, as well as the disappearance of historic commitments in the proposal that have long protected the EU's most vulnerable partners. Ministers meeting on 18 May should push to fix both.
These concerns are increasingly being voiced within the European Parliament. In April 2026, the European Parliament’s Foreign Affairs (AFET) and Development (DEVE) Committees published a draft report on the Global Europe Instrument. While broadly supportive of the European Commission’s direction of travel, the report reflects growing unease across political groups about the balance between flexibility and accountability, the erosion of poverty reduction objectives, and the risk that geopolitical priorities could crowd out longstanding development commitments. The questions the Committees are raising mirror those layed out below.
Strategic objectives crowding out development
At its heart, the proposal is trying to do two things at once. The EU wants to remain a credible development actor, committed to reducing poverty, supporting fragile states, and advancing the Sustainable Development Goals. At the same time, it wants to be a more assertive geopolitical player, competing on infrastructure, securing supply chains, managing migration, and advancing European commercial interests.
Poverty reduction and geopolitical interests are not always incompatible. But the proposal never clearly states which one takes priority when they conflict. That ambiguity is the central problem from which most others flow.
The parliament’s draft report posits that without clearer safeguards, the growing weight given to geopolitical, migration and strategic objectives will gradually displace the instrument’s development purpose.
Perhaps the most significant structural shift in the proposal is the reframing of the EU’s role as an “investment commission”. This represents a move away from development aimed at the most vulnerable, even where returns are low, toward a transactional model where EU strategic and commercial interests are explicit objectives.
The critique is not that EU interests are illegitimate. The problem is that there is no clear hierarchy when these interests conflict with genuine development need. In practice, experience suggests the more visible, more investable, more headline-grabbing projects will win out over quiet, slower, grant-based work in least developed countries and fragile states.
The procurement problem: discretion without guardrails
The proposal stops short of a blanket “buy European” rule, but a preference is still a preference, and this one puts Europe first. Taken together, the funding mechanisms and delivery channels tilt the playing field toward European firms, and that tilt has consequences beyond procurement process. When poverty reduction and commercial interest conflict, European preference tips the balance. The question is not whether EU firms should benefit from EU investment, but whether that preference should operate without limits, transparency or accountability for its development consequences. And on that question, the current text is silent. Unease around this is visible in the European Parliament too. Amendments emerging from various political groups and debates push for stronger safeguards around transparency, scrutiny, development effectiveness and partner-country ownership, precisely because the current text leaves too much to the European Commission's discretion.
Three provisions are directly relevant:
- A permissive restriction clause (Recital 64). The Commission may restrict participation in award procedures on grounds of nationality, origin, or indirect control, including where “in the strategic interests of the Union.” This is framed as a security tool targeting high-risk suppliers, but the language is broad enough to be applied more widely. The concern is not what it mandates, but what it enables without clear limits or oversight.
- A direct-award route for EU firms (Recitals 69–70). Grants can be awarded without competitive tender to private law entities established in a Member State where the project is in the Union’s strategic interest, covering infrastructure feasibility studies, critical raw materials, and digital infrastructure. This creates a preferential channel for European private sector entities in strategically defined areas, bypassing the competitive process that ordinarily protects value for money.
- An institutional preference for European implementers (Recital 71). In indirect management, actions should “preferably” be entrusted to the European Investment Bank, the European Bank for Reconstruction and Development, or a Member State organisation. This is not a hard legal requirement, but it establishes a structural bias toward European institutions as implementing partners when the Commission delegates budget implementation.
There are legitimate public policy grounds for de-risking EU investment in strategic sectors, for preferring trusted implementing institutions, and for restricting participation where genuine security concerns arise. The problem is the combination: broad discretion, limited oversight, and no explicit requirements to demonstrate that European preference produces better development outcomes than competitive alternatives.
Restricting participation creates three compounding problems. First, it undermines aid effectiveness, as partner countries cannot access best-value procurement, which inflates project costs and reduces development impact per euro spent. Second, provisions that favour a restricted group of countries could complicate cooperation between European financial institutions and international partners that operate under open procurement systems. This may limit opportunities for co-financing and risk sharing, potentially pushing European implementing partners to finance projects alone which may not always be consistent with their risk management frameworks. Third, it may undermine EU competitiveness in the long run, by insulating EU firms from the competitive pressure that drives innovation, while creating resentment in partner countries that limits future commercial relationships.
The direct-award provision is the most specific concern. Channelling development finance as direct subsidy to European private sector entities, even in strategically important areas, conflates development objectives with industrial policy. It risks creating a precedent where the choice of implementing firm reflects EU commercial interests rather than development effectiveness, and where partner countries have no meaningful say in how their cooperation programmes are structured.
Flexibility is welcome, but accountability must come with it
The proposal rightly introduces greater flexibility to respond to crises, seize strategic opportunities, and adapt to evolving geopolitical priorities. In an increasingly unpredictable global context, this agility matters.
But flexibility must not come at the expense of accountability, predictability for the EU’s partners, or the EU’s ability to deliver on its international commitments. Partner countries calibrate their own planning around EU disbursements and unpredictable rebalancing undermines this. Striking the right balance between flexibility and clear, predictable development priorities is essential to ensure the instrument remains both responsive and effective. The current proposal tilts too far toward the former and not enough toward the latter. The European Parliament’s joint AFET/DEVE draft report makes the same point, arguing that increased flexibility must remain anchored in transparency, predictability, and meaningful democratic scrutiny.
This again points to a deeper problem: the lack of clear objectives hierarchy. Without answering the question of what the instrument is primarily for, agility and flexibility are not virtues; they are opportunities for mission creep.
A historic benchmark at risk: human development
A significant loss in the proposal is the disappearance of the longstanding human development benchmark which previously ring-fenced at least 20 percent of EU development funding for health, education, nutrition, and social protection. They are the foundations on which everything else, including infrastructure, trade, resilience, stability, depends.
The European Parliament’s draft report flags this, and proposes reinstating the commitment, particularly for the most marginalised.
The EU’s Global Gateway has become one of the few large-scale public finance instruments still expanding in Africa, particularly as bilateral ODA to sub-Saharan Africa fell 26 percent in a single year. Yet our analysis of flagship projects shows that the bulk of investments appear directed toward EU strategic corridors for critical minerals, and not necessarily aligned with African partners’ own development priorities. Less than 10 percent of flagship projects are in education and research; only slightly more than 10 percent are in health. The European Parliament’s draft report also underlines that strategic investment initiatives must remain responsive to partner-country priorities, not shaped primarily by European geopolitical interests.
The case for a spending target is not without nuance. In general, such targets can lead to a degree of box-ticking, with money directed toward meeting a threshold rather than maximising impact. But without this safeguard, there is no reliable mechanism to prevent severe cuts to the foundational investments that underpin progress across all other development areas. Ministers should urge its reinstatement.
The bottom line
So, is the Global Europe Instrument fit for purpose? The answer is, not yet. Its strengths sit alongside an unresolved dual mandate, a weak accountability architecture, and the quiet disappearance of the benchmark that has long protected the EU’s most vulnerable partners.
The European Parliament’s own draft report signals that these concerns are widely shared across political groups. Flexibility without guardrails is not agility; it is drift away from the poorest countries, away from the foundational investments that actually reduce poverty, and away from the commitments that give EU external action its credibility.
Thank you to Eloise Todd for helpful comments on this draft and to Anita Käppeli for feedback on an earlier version.
