Last week, the Council of the EU adopted the EU’s formal position ahead of the Fourth International Conference on Financing for Development (FfD4), which will take place in Seville later this month. The Council Conclusions highlight a strong commitment to multilateralism and sustainable development amid a complex and rapidly evolving global landscape. Despite some promising elements, the EU’s position falls short of offering a fundamentally new approach to development finance that reflects geopolitical, economic and fiscal realities.
A (too) traditional vision in a changed world…
The recently adopted Council Conclusions present a commendable reaffirmation of the EU’s long-standing development priorities, the Sustainable Development Goals (SDGs), gender equality and rules-based multilateralism, with the UN at the core. But despite the increasingly challenging geopolitical and fiscal context highlighted in the document, its framing, objectives and overall narrative remain largely unchanged.
While continuity (and predictability) has value, this is a missed opportunity to outline the evolving EU’s approach. It does not, for instance, emphasise its ambition to better combine development with export and investment promotion with a view to mobilising additional sustainable private investments at scale. This articulation is more urgent than ever, given a decline in concessional finance and the need to mobilise private capital more effectively.
…yet a distinctive and more ambitious position from the US
Importantly, the EU refrains from aligning with the more limited ‘30-paragraphs’ type of approach advocated by the US. Instead, the Council Conclusions present a broader, more values-based agenda. For instance, they express strong support for rules-based multilateralism, with the UN at its core, and include a dedicated paragraph on gender equality and women’s empowerment. This signals the EU’s ambition to uphold its values and standards, which will be at stake not only in multilateral policy processes like FfD4, but also in multilateral institutions like the World Bank, the International Monetary Fund and regional development banks.
In addition, the EU commits to reforming the international financial architecture, although the distinction between incremental improvements and systemic transformation, particularly in areas such as debt, remains somewhat ambiguous. As the EU seeks to position itself as a credible partner to the Global South, greater clarity and boldness on these issues would enhance the EU’s ability to offer a truly alternative development model.
Aligning EU’s ambitions with reality
Recommitting to the target of allocating 0.7% of gross national income to official development assistance (ODA), while politically important, is widely seen as unachievable in today’s fiscal climate. Many partner countries in the Global South are aware of this reality, and continued reference to it, without credible delivery, risks deepening mistrust.
FfD4 could have provided an opening for a more honest, transparent and pragmatic dialogue with partner countries, focused on what the EU can realistically offer and how limited public resources can be deployed most effectively. Instead, the EU’s position reiterates aspirational targets.
The EU’s policy agenda remains broad, with multiple overlapping goals. It would benefit from greater focus and strategic clarity, especially in managing trade-offs, such as balancing large-scale private investment mobilisation and investing in fragile or high-risk contexts. In addition, it needs to be more aligned with the priorities of partner countries.
Limited integration with EU policy processes
A clearer articulation of how the FfD4 agenda aligns with existing EU strategies, particularly the Global Gateway, and ongoing discussions on a New Pact for the Mediterranean, would have strengthened the EU’s position. If the EU aims to better link investments of development finance institutions and export credit agencies, the latter’s role in development would be worth highlighting.
Unlike some other global actors, the EU appears to value the distinction between ODA and non-ODA instruments, recognising that they serve different purposes. But if the EU is serious about deploying a full range of financial tools to meet development and geopolitical objectives, then it is essential to bring export credit agencies, which are currently under-leveraged, into this discussion.
The EU could also support local currency financing, country platforms (which will take even more prominence at COP30), debt contingency clauses and debt-for-SDGs swaps. This would help the EU implement its own policy processes, such as the Global Gateway.
A sharper narrative and focus on delivery
To lead effectively in a world of constrained resources and heightened geopolitical competition, the EU must sharpen its narrative, focus on pragmatic delivery and clarify how it intends to use its distinct institutional architecture to offer credible alternatives to other global powers. FfD4 offers an opportunity not simply to restate values and broad principles, but to redefine what European leadership in development finance looks like – based on realism, partnership and results.
About the Author
Karim Karaki is the head of ECDPM’s economic recovery and transformation team.