Foreign aid is not a luxury - it’s Europe’s smartest investment

Franz Fayot is a member of parliament and former Minister for Development Cooperation and Humanitarian Affairs, and Charles Goerens is a Member of the European Parliament for Luxembourg.

The world is facing multiple and interconnected crises that demand urgent political and financial responses. Yet, major donors such as the United States are scaling back development aid, with ripple effects that extend far beyond budget lines. Lives are at risk, partnerships unravel, and political stability is threatened.  

At a time of global realignment, Europe faces a choice: retreat or lead. But Europe cannot afford to watch from the sidelines. 

As the European Commission presents its proposal for the next Multiannual Financial Framework (MFF) on 16 July, a central question must guide negotiations: what role will Official Development Assistance (ODA) play in shaping Europe’s global future? Under financial pressure, cutting ODA might appear to be an easy budget fix. It is not. It’s a false economy. 

Reducing ODA would weaken Europe’s strategic positioning, shrink its economic resilience, and erode its ability to shape global outcomes in line with its values and long-term interests. 

Hitting the 0.7% target is more than a moral imperative. It’s strategic.  

Achieving the 0.7% ODA target isn’t just a moral obligation, it’s a strategic decision 

Some EU countries are already leading by example. 

Luxembourg, for instance, isn’t just meeting the 0.7% target, it’s exceeding it, allocating a full 1% of Gross National Income to development cooperation. This isn’t just generosity, it’s long-term strategy. And it delivers. 

Thanks to this sustained commitment, Luxembourg has cultivated strong, resilient partnerships in Africa and other regions. Its ODA is not merely charity, it’s an instrument of diplomacy, economic engagement, and global positioning.  

By progressively scaling up its investment in development, Luxembourg contributes to stability and shared prosperity in regions essential to Europe’s future. 

The message is clear: ODA is not a soft extra. It’s smart, forward-looking policy. 

Why ODA is Europe’s competitive edge 

Development aid reinforces the EU’s top priorities, strategic autonomy, energy security, public health, and global competitiveness. It helps stabilise conflict-prone areas, builds resilient supply chains, and cultivates the international partnerships that fuel innovation, investment, and trade. 

ODA opens doors. For every euro spent on aid, the European economy directly benefits, notably with a one-euro increase in exports and deeper economic ties. 

When we scale back, we don’t just cut funding. We sever future connections. But by investing in ODA, we lay the groundwork for sustainable development and prosperity, at home and abroad. 

Europe must lead before the window closes 

As the U.S. pulls back from its global commitments and other powers aggressively expand their influence, the EU has a rare and urgent opportunity to step into a leadership role. Flagship initiatives such as the Global Gateway and the Green Deal require robust and reliable partnerships, none of which are possible without a strong foundation in development cooperation. 

The time to act is now. 

0.7% is just the starting line 

The 0.7% ODA target is not ambitious - it is the minimum standard for credibility. Luxembourg’s example demonstrates what can be achieved when development is viewed not as a sunk cost, but as an investment in shared stability and mutual benefit. 

As the EU finalises the next MFF, we urge leaders not just to defend ODA levels, but to strengthen them. Doing so is not just a matter of principle; it is a matter of strategic necessity. 

Fail to act, and the costs - human, economic, and geopolitical - will be steep. 

Act boldly, and Europe can secure its influence, partnerships, and prosperity for generations to come.