Overseas aid big loser in German austerity drive, development groups say

BERLIN (Reuters) -Overseas aid is a big loser in the German budget deal, development agencies have said, after the coalition government agreed to spend almost a billion euros less on development assistance as part of cuts to get its 2024 finances in order.

The government plans to cut the development ministry’s budget by a further 400 million euros ($438 million) next year, on top of a 530 million-euro cut already planned for 2024 before a constitutional court ruling forced the coalition to draw up new spending plans.

“Germany is the second-largest donor in the world and these cuts have a signalling effect on other countries,” said Meike Riebau, director of advocacy and policy at Save the Children Germany.

The budget for development stood at 13.4 billion euros in 2021 when the government took office. At the end of this legislative term, it will have around 3 billion less, said Lukas Goltermann, policy adviser at VENRO, an association of development and humanitarian non-governmental organisations in Germany.

“I don’t think Germany has ever seen such a big cut in its development spending,” said Goltermann. “It’s important not only from a moral perspective but also from a strategic perspective.”

Together with the U.S. and the EU, Germany provided more than 50% of official development assistance in 2022, Alina Hemm, consultant at Seek Development, said.

“If Germany steps down from its forerunner role going forward, we are at risk of a huge deficit in development finance,” Hemm said.

Global health, gender equality and agriculture, climate and social protection are the top development priorities in the German government’s coalition agreement.

Chancellor Olaf Scholz has said the government will stick to its goals “but we must do so with less money which means cuts and savings”. Details on the cuts were announced on Tuesday and now each ministry will have decide how to put them into effect.

“We are currently working on implementing the austerity decision,” a spokesperson for the ministry of economic cooperation and development said.

Deborah Duering, a member of parliament for the Greens – part of the ruling coalition – spoke out against the cut.

“It is not only a humanitarian imperative but also financially more sustainable to prevent crises rather than manage them later,” said Duering, who heads the economic cooperation and development committee in the Bundestag.

Development aid is also key for Germany from a geopolitical and geoeconomic point of view, the experts said.

“We can’t shape international agendas if we cut development aid,” said Stephen Klingebiel, head of Inter- and Transnational Cooperation at the German Institute of Development and Sustainability (IDOS).

($1 = 0.9126 euros)

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