Abigail Watson
Research Fellow, GPPi
The European Union is facing one of the most dangerous times in its history but its funding mechanisms lack the flexibility and focus to keep the EU and its partners safe.
Key foreign policy priorities for Ursula von der Leyen’s new Commission are continued support for Ukraine and how to better compete with Russia and China. While these are crucial issues, the European Union is also facing “the most dangerous moment internationally since the end of the Cold War”. Not only does Russia continue to wage war on Europe’s doorstep. Israel’s war on Gaza has now spread to the West Bank, Yemen, Syria, Lebanon and has increased the prospects of direct confrontation with Iran. Commentators warn that “the risk of another Korean War is higher than ever”. And US officials continue to worry about China’s “increasingly dangerous and unlawful” activities around Taiwan and in the South China Sea. These existing and potential conflicts are volatile, complex and connected, and European responses will need to be nuanced, considered and sensitive to inter-related dynamics. Unfortunately, it doesn’t seem like the EU is particularly well prepared for an impending chain reaction.
And it should be: while the EU has spent decades iteratively improving its integrated approach to conflict, funding for peace and security still lacks flexibility and the trajectory of EU policies seem to be making matters worse. Global Gateway could be a powerful and useful tool in improving the EU’s international offer, but unless it gives sufficient thought to the place of conflict affected contexts in its new strategy, the EU gap in peace and security funding will grow.
This matters – it would be a disaster for human security and would make the EU less safe. Violent conflict can disrupt trade routes. It can stunt national growth and disrupt regional economic development, including among EU candidate countries and in many of the areas the EU is rolling out flagship Global Gateway initiatives. Violent conflict has helped violent proscribed groups to recruit and grow and has, arguably, facilitated and solidified anti-Western sentiment among populations and elites. It has forced people around the world to flee their homes. It has contributed to democratic backsliding and shrunk the community of nations – close to Europe and around the world – that respect human rights and democratic values. Geopolitical rivals like Russia and China are also exploiting the fragility of conflict affected countries to expand military and economic influences. The EU, then, needs to improve its own approach.
One area, in particular, where the EU needs to continue to improve is flexibility. Funding can only effectively respond to conflict if it can be delivered quickly when a crisis escalates or when an opportunity to move towards peace emerges. Most EU funding is based on the logic of good development, it is long-term and reliable but lacks flexibility. The few mechanisms which do provide flexibility in the EU – namely the rapid response mechanisms and the cushion for emerging challenges and priorities – are useful but are not sufficient to deal with the scale and variety of the crises and conflicts the EU must now grapple with. In fact, “80% of the cushion has already been earmarked, leaving just €1.9 billion until 2027.”
The Neighbourhood and Enlargement regions have received a much larger share of funding from the rapid response mechanisms and the cushion, “with sub-Saharan Africa coming ‘far second’”. Similarly, the dramatic increase in European Peace Facility funding and the success of the newly established €50 billion Ukraine Facility, following Russia’s full-scale invasion of Ukraine is a powerful demonstration of how political will can drive flexibility in the EU.
However, even in areas that receive more funding there is still a gap. The amount of flexible funding remains comparatively low amidst larger EU funding infrastructure, and the new mechanisms do nothing to create the kind of day-to-day flexibility EU officials so desperately seek. An independent assessment of the EU’s external funding instruments concluded that “the succession of severe global or regional crises” since 2021 have severely “depleted the EU’s flexible funding sources.” Nor are other parts of the EU funding architecture responsive enough to fill the gap; as one expert we spoke to noted: “the gap is not just in the immediate response but between rapid action and long-term engagement … the issue is the follow-up and getting other parts of the EU to take on what’s started by” these instruments and new initiatives.
Far from being a focus of the new Commission, this conflict gap risks growing as the EU shifts its focus to influence through economic investment (and fails to consider conflict in its new approach). Global Gateway is indicative of the EU’s recent shift; the “EUR 300 billion programme for financing and building clean infrastructure,” has received huge political backing and is recalibrating prioritizations across EU institutions. While potentially a powerful and useful tool for improving the EU’s international offer and encouraging more green investment, Global Gateway activities “need security and ‘good enough’ governance with calculable risks and predictability.” Conflict affected contexts – which tend to have volatile political situations – rarely present solid, safe investment opportunities. For this reason, the 225 flagship initiatives already launched or planned under Global Gateway are located mostly in emerging markets. In contrast, the 30 to 40 highly fragile or conflict-affected countries around the world are unlikely to meet the necessary standards of good-enough governance to receive investment.
There is a risk, then, that in the reprioritization of EU decision-making towards investment, conflict affected contexts fall through the gaps more than ever before. Both the EU and specific member states seem to be aware of this problem, but a solution has yet to be proposed. In a recently leaked twenty-page briefing from the Directorate General for International Partnerships, the one line dealing with conflict-affected contexts simply stated that a “different approach is needed for so-called ‘fragile countries’, where deep and intertangled political, security and humanitarian crises call for a focus on enhancing the resilience of local populations.” There is, then, a need for more concrete solutions.
Addressing this problem will require more nimble financial tools to support specific efforts – for instance, to mitigate particular risk factors for conflict or help local parties work toward a more stable political deal that serves their citizens better than war. The money for such tools is there in the geographic envelope of the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – GE) or its successor. As the momentum around Global Gateway shows, what is needed is the political signal and packaging. For instance, the new defence portfolio could move beyond capability investment and industrial policy to ensure conflict stays relevant in EU decision-making. Alternatively, political will could be thrown behind the implementation of the EU’s Integrated Approach to External Conflicts and Crises: encouraging better innovation and coordination in developing initiatives in conflict affected countries, to achieve more with existing resources.
Whatever form solutions take, there should be a clearly articulated recognition of the need to prioritize strategic investments in peace and security not just in the EU’s neighbourhood but beyond. The EU’s current withdrawal from fragile and conflict-affected contexts will only undermine EU values and, inevitably, make the EU less safe and less prosperous.
*Abigail Watson is a Research Fellow at the Global Public Policy Institute (GPPi)
