CONCORD AidWatch 2026: EU Development Aid Plummets Amid Widespread Cuts as Global Solidarity Risks Backslide

Official Development Assistance (ODA) from European Union Member States and EU Institutions declined sharply in 2025, dropping by 11.4% in real terms compared to 2024, according to the 21st annual AidWatch report published by CONCORD, the European NGO confederation for relief and development.

The report highlights a growing gap between European policy decisions and public sentiment, noting that 55% of people globally back international cooperation, even when it involves trade-offs on national interests.

Key Findings & European Trends

• Simultaneous Reductions: Unlike in previous years, when EU Institutions offset cuts by Member States, both levels reduced ODA spending concurrently in 2025. ODA from EU Institutions dropped by 13.8% (the steepest drop in a decade), while Member States reduced spending by 9.9%.
• Failure to Meet Targets: Collective EU ODA dropped to 0.42% of Gross National Income (GNI), the lowest level since 2018. Only Luxembourg (~1.0% GNI), Sweden, and Denmark met or exceeded the international 0.7% GNI target, with most Member States remaining below 0.3%.
• Rise of “Inflated” Aid: An estimated 22% of reported EU aid was classified as “inflated”, meaning over one-fifth failed to meet core ODA criteria due to weak development relevance, inclusion of in-donor refugee costs (IDRC), imputed student costs, or failure to reach Majority World countries.
• Geopolitical Realignment: Disbursements from EU Institutions to Ukraine rose by 65.2% in 2025, while assistance to Least Developed Countries (LDCs) and Fragile and Conflict-Affected Countries (FCAs) was squeezed out, with LDCs receiving just 10.5% of gross bilateral aid in 2024.

The Position of Cyprus & Regional Context

While major donors such as Ireland, Germany, and Belgium made significant budget cuts, and others like Spain, Denmark, Luxembourg, and Hungary registered increases, the findings highlight specific challenges for smaller EU Member States, including Cyprus.

As highlighted in the report, Cyprus stands out within the EU landscape for bucking the broader trend by increasing its aid allocation. However, like other Mediterranean Member States, its contributions continue to face structural constraints, including a heavy reliance on in-donor refugee reporting and broader regional economic considerations that keep total allocations below the recommended 0.7% GNI target.

Good Practices & Key Policy Recommendations

CONCORD highlighted several model practices in ODA budgeting:

• Luxembourg: Excludes in-donor refugee costs entirely, keeps climate finance additional to core development funds, and delivers nearly 100% untied grant assistance.
• Sweden: Applies a strict 8% cap on in-donor refugee costs to prevent artificial budget inflation.

“New financing instruments can complement ODA, but must not redefine it. Development impact must remain at the centre, backed by transparency and strong safeguards for poverty and inequalities reduction”. — Lur Fernandez Salinas, CONCORD Policy and Advocacy Adviser

Core Policy Recommendations

1. Maintain Concessionality: Protect the core mandate of ODA focused on poverty and inequality reduction.
2. Clear Roadmaps: Establish step-by-step plans to reverse budget cuts and reach the 0.7% ODA/GNI commitment (with 0.15%–0.2% for LDCs) by 2030.
3. Cap Inflated Costs: Introduce strict ceilings on in-donor costs (such as refugee and student costs) as a first step toward their gradual exclusion.
4. Prioritize Grant Funding: Focus on grants and highly concessional finance over private sector instruments and market-rate loans in vulnerable countries.