Germany’s Role in EU Development Policy: From Broker to Agenda-Setter

This blog is part of a series by CGD and partnering institutions from Germany focused on presenting specific policy proposals for the next German government’s leadership on global development issues.

Germany is the world’s second largest development donor after the US, and the European Union’s (EU) largest aid provider. And yet its financial heft is not commensurate with its positioning on development in the EU. For the second time, Germany reached the aid target of 0.7 percent of gross national income (GNI) in 2020 (the first being in 2016, albeit in part due to its response to the high influx of refugees into the country), making significant contributions to the global pandemic response, including through the EU, COVAX, and the WHO. With a new government taking over the helm of the country and building on its financial firepower, Germany now has the opportunity to fully embrace a leadership role in the EU as an agenda-setter in development, driving forward innovative ideas, rather than as a mere broker.

Germany is considered to be a heavyweight member state in the EU and usually acts in tandem with France. Angela Merkel herself has been accredited with holding the EU together in past crisis situations. There have been instances (such as the Eurozone crisis, or during the presidency amidst the COVID_19 crisis) where German leadership has been forceful and single-minded. However, there are other cases in which Germany has “led from behind,” attempting to organise and negotiate diplomatic solutions (as in the migration crisis), which have not always proved fruitful.

A broker for EU development policy

In EU development policy, Germany has played a strong intermediary role, successfully getting deals over the line. This role was particularly clear during Germany’s EU presidency, most notably with the new Global Europe Financial Instrument (or more commonly known as the Neighbourhood, Development and International Cooperation Instrument) and the new agreement between the EU and the African, Caribbean, and Pacific countries. Germany has a reputation of being a respected and reliable partner amongst its peers. And having achieved the 0.7 percent target, Germany has now shed its stigma of being a slow starter when it comes to development finance.

However, the evolution of Germany’s own international development policy has developed largely independent from the EU’s development policy. Its main strategies—BMZ 2030, the Marshall Plan with Africa, the Compact with Africa—were devised without integrating European partners or securing early buy-in at the EU level. Particularly for its Marshall Plan for Africa, this approach of keeping German development policy separate from the EU’s has has subsequently prevented it from significantly influencing the positions of member states.

What makes for good leadership in EU development policy

A good agenda-setter in EU development policy develops innovative and coherent strategies and quickly adapts to changing situations. It also needs to build coalitions from the outset with other member states and the EU Institutions to successfully rally partners behind a common approach. Member states have tended to shape EU development policy by “uploading” their policies and objectives to the European level, thus creating a composite of a variety of policies that result in an overloaded, broad, and unstrategic agenda. All member states, but in particular the more influential ones, tend to have a strong interest in defining what the EU should or should not do, while shielding their national policies from EU influence. Yet, even for a big member state, such as Germany, transformational impact is difficult to achieve through national policies alone. Initiatives, on the other hand, that involve the EU Institutions and selected member states from the outset—be it at the multilateral level or for strategies with specific purposes—not only lend more weight but also strengthen leadership and credibility at the EU level.

Rather than seeking to synchronize its national efforts with those at the European level, German leadership should seek to influence and guide activities by providing solutions to common problems or offering ideas about how to accomplish collective purposes and mobilising the energies of others to follow these courses of action.

Obstacles to transitioning from broker to EU leader

An innovative approach to development policy—be it at European or at national level—will have to build on a thorough understanding of the role of international cooperation in achieving sustainable development both in Europe and globally. While COVID-19 revealed the fragility of the gains made in human development by developing countries over the last decade, the need to promote and provide global public goods (GPGs) is increasing, due to the scope, interconnectedness, and complexity of the Sustainable Development Goals (SDGs), transnational development challenges, as well as the crucial socio-ecological reconstruction window that is opening up.

However, there are two fundamental challenges that Germany needs to overcome to address this agenda and transition towards a leadership role in EU development policy. The first is around its own internal mechanics. Germany is the only remaining European donor with a standalone development ministry. For some, this is a key advantage, as it allows the Federal Ministry for Economic Cooperation and Development (BMZ) to focus attention and promote issues of global sustainability and development in the Cabinet. However, the “Ressortprinzip”—the principle of ministerial autonomy in decision-making—means that internal processes of coordinating with the foreign ministry and other line ministries are both time and energy consuming, and often result in a lack of a joint approach across government. This organization makes a convincing stance in the EU even more difficult to achieve. Secondly, while Germany has a number of strategy and policy papers, such as the German Sustainable Development Strategy, it does not have a clear overarching strategic vision for how global sustainable development issues are organised across the federal government and implementing organisations. The absence of a whole-of-government approach means that Germany is unable to address the incoherence between domestic and European policies on global sustainable development across government. Furthermore, Germany lags behind other EU member states in articulating its development policy strategy for social and ecological reconstruction in a post-COVID world, despite having most instruments at hand with BMZ 2030 and the new German Sustainable Development Strategy.

This lack of an innovative vision for the role of international cooperation and development in pursuing global sustainability transformations mirrors the absence of debate on development policy in the run-up to German elections. Germany’s role in development, let alone its role in EU development policy, are niche topics in all the political party manifestos. What exists mainly reflects the domestic agendas of the political parties with the Social Democrats (SPD) emphasising fair globalisation and trade policies, the Greens climate finance, the Liberals (FDP) market mechanisms in support of development and the Conservatives (CDU) security and the role of the private sector. Not a single party presents a strategic vision for global sustainable development nor convincing ideas of how to address existing incoherencies between domestic and external objectives.

Actively shaping the future EU development agenda

As a new German government takes up office, it needs to define its agenda not only for development policy but also for how to promote global sustainability transformations across the government. In doing so, the European perspective needs to be integrated from the outset, taking into account the challenges the EU is better equipped to tackle than single member states, the shared principles and priorities of the EU and mutual advantage, and how it can lead that agenda as part of the collective, recognising that transformational impact can only be generated by working together. But a convincing strategic vision is paramount for others to follow. Leadership also requires a concerted effort to address domestic issues that hinder global sustainable development. The supply chain law is a key example of a BMZ led cross-government initiative that successfully contributed to a step change in domestic politics and as a result makes it possible for the incoming new government to further push similar legislation at the EU level and claim leadership.

When the new German government comes in, decisions around EU distribution and programming of funds will have already been made. However, the question of how the EU positions itself around the immediate and long-term challenges spewed by the pandemic and how member states align their national policies with a joined-up EU approach for “building back better” will be live. The external dimension of the EU’s Green Deal is at the very heart of these questions. There has been little progress in defining an integrated approach that links both domestic and external policies and that addresses negative spill-overs of European policies and of the domestic policies of member states. Furthermore, although the “Team Europe” approach has undoubtedly achieved greater visibility of EU development, there has also been little progress towards defining a common strategy that bridges social and ecological development objectives. There is a very real risk that social objectives become a blind spot of the EU Green Deal thereby overlooking buy-in from partner countries. No matter how important a green recovery is, most of the EU’s partners are now first and foremost prioritising the immediate damage done to human development and jobs.

Beyond defining its own approach towards post-COVID reconstruction that is sustainable and transformational in partner countries, a new German government should seize the opportunity to actively shape this agenda at the EU level, combining its brokering skills with a progressive agenda-setting role.