One year ago, US President Donald Trump halted most American foreign assistance, triggering the largest shock to global development cooperation in modern history. Europe which has been directly affected through its own aid projects, has sought to partially fill the void. Yet the European Union itself is grappling with budget cuts and growing political resistance to foreign aid.
Development cooperation underwent an unprecedented upheaval last year. A decision by the Trump administration in early 2025 to freeze and subsequently dismantle most programs of the U.S. Agency for International Development (USAID) created a gap in global aid funding exceeding 60 billion dollars.
Trump ordered a 90-day freeze on all foreign assistance, and by March 2025, 83 percent of USAID programs had been terminated. Out of 6,200 ongoing projects, more than 5,200 were halted.
“The impact is direct on tens of thousands of people we were assisting, especially in Syria, or on thousands of refugees from Nagorno-Karabakh in Armenia, where we had to terminate a project,” said Tomáš Urban, head of communications at the Czech humanitarian organization People in Need, describing the immediate consequences.
In July 2025, U.S. Secretary of State Marco Rubio officially announced the closure of USAID. Of the original 120 billion dollars in contracts, only 69 billion remained in force.
Human costs of the cuts
A recently published study in The Lancet warns that cuts to U.S. aid could result in more than 14 million excess deaths by 2030, including approximately 4.5 million children under the age of five.
“In some developing countries, funding from USAID accounts for up to 70 percent of healthcare budgets,” Urban warned.
During the 90-day freeze alone, nearly 12 million women and girls lost access to contraception. Cancelled programs included malaria prevention initiatives protecting 53 million people, as well as vaccination support worth 2.6 billion dollars. Depending on whether these programs are replaced by alternative funding, up to 75 million children could be affected.
Can Europe replace the United States?
Before 2025, the United States provided roughly one third of global development assistance, making the 60 billion dollar shortfall extremely difficult to replace.
“Within the EU, there is consensus that the EU cannot and does not want to replace the United States. Nevertheless, the EU will continue to support international cooperation,” the Czech Ministry of Foreign Affairs told Euractiv.cz.
In 2023, the European Union provided approximately 100.6 billion euros in development aid, representing 41 percent of global Official Development Assistance. Collectively, EU aid amounted to 0.57 percent of gross national income, compared to just 0.24 percent in the United States.
Europe cuts back
Despite its leading role, Europe itself is reducing aid. In 2024, assistance from EU member states fell by 8.6 percent to 88.7 billion dollars, with only three countries allocating at least 0.7 percent of their gross national income to development cooperation.
Germany, the EU’s largest donor, reduced the budget of its development ministry from 12.2 billion euros in 2023 to 11.2 billion euros in 2024, with further cuts planned for 2025. France and the United Kingdom also scaled back aid. The UK has announced additional reductions in order to increase defence spending and is on track to spend just 0.3 percent of gross national income on aid by 2027, one of the lowest levels since records began.
The European Union has already confirmed a two-billion-euro reduction in funding for its main development instrument for the period 2025–2027. In debates over the 2028–2034 budget, scenarios involving even deeper cuts have emerged, with some analyses suggesting reductions of up to one third, although no official decision has yet been made.
“Fully replacing U.S. aid is unrealistic,” Urban said. “It mainly depends on the governments of individual states. Foreign aid has usually amounted to tenths of a percent of gross national income. It also depends on agreements with other countries, and in this regard we hope that the European Union and its agencies will take on a stronger role so that aid is better coordinated, more effective, and aligned with shared foreign policy priorities.”
Why Europe is cutting aid
The reasons behind Europe’s retrenchment are complex. The rise of far-right and nationalist movements across the continent has weakened political support for development assistance, while parts of the public have grown more sceptical about financing activities outside Europe.
At the same time, post-pandemic economic pressures and rising public debt have placed strong pressure on national budgets. In this context, development aid has become an easy target for cuts, often framed as a non-priority expense rather than a long-term investment in global stability.
Another factor is the increase in military spending and direct financial support for Ukraine, which further limits the resources available for development programs. Humanitarian organizations fear that Europe’s development agenda may gradually be side-lined by new geopolitical and security priorities.
A new paradigm in European development policy
Some analysts therefore speak of a paradigm shift in the EU’s approach to development cooperation. Aid is increasingly aligned with strategic European interests and less focused on traditional poverty reduction through grants. A prominent example is the Global Gateway initiative, which emphasizes infrastructure investment and the mobilization of private capital.
“We already account for 42 percent of global development aid. If the United States withdraws even further, we could reach as much as 60 percent,” European Commissioner Jozef Síkela said in an interview with Czech news site Seznam Zprávy. “But it’s not about replacing one form of public aid with another. That is not enough. We need to find ways to attract more private capital into this area.”
According to Síkela, investments should be directed not only toward new markets but also toward Europe’s future strategic security.
“Today it is clear to us that we must trade with trustworthy partners who share our values. There are 12 trillion euros sitting in current accounts in Europe. Even a small part of these savings could have an enormous impact if we find a way to persuade their owners to invest this money, for example through the Global Gateway fund,” he said.
Czechia holds its course
Within the European Union, Czechia has been actively involved in coordinating responses to the impact of U.S. aid cuts. The effects have also been felt by Czech-linked projects.
“We had to terminate one project in Bosnia and Herzegovina that was jointly funded by Czechia and the United States. More broadly, we see the impact on the implementers of our projects, who are now having to cope with reduced funding,” said Zbyněk Wojkowski, head of project implementation at the Czech Development Agency.
Despite budgetary pressures, the Czech government has so far rejected further cuts.
“Any suspension or reduction of Czech development cooperation would harm the economic and political interests of our country,” Wojkowski stressed.
According to the Ministry of Foreign Affairs, it is crucial for Czechia that development cooperation, even in times of fiscal pressure, opens access to much larger European funding streams and creates opportunities for Czech expertise and companies, particularly within Global Gateway projects focused on transport, digitalization, and energy infrastructure.
“Engagement in development efforts improves the reputation of Czechia and, above all, opens up opportunities to access significantly larger European or international resources while applying Czech expertise and involving Czech companies. We are doing everything we can to ensure that Czech companies, the non-profit sector, and academia gain opportunities in these projects,” the ministry said.
A new era of development assistance
Ten months on, it is clear that the U.S. retreat from conventional development aid is permanent and that Europe is neither prepared nor willing to fill the entire 60 billion dollar gap.
Instead of simple compensation, European policy is moving toward a pragmatic strengthening of its influence in regions such as Africa, Latin America, and Central Asia. The European Union benefits from a reputation as a stable and predictable partner, in contrast to what is often described as an aggressive transactional approach by other global powers.
The key to the future of development financing is therefore not only public development aid, but also the mobilization of Europe’s vast private savings for development-oriented investments.
