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In early 2020, as the COVID-19 pandemic began to ravage the world, the European Union (EU) sprang into action with its member states and financial institutions to deliver a collective global response, laying the foundations of more unified European approach to international development that has been termed “Team Europe.” With a combined €40.5 billion in aid pledged since the start of the crisis, Team Europe’s support to help developing countries tackle the immediate health needs and mitigate the social and economic consequences of the pandemic has been an unprecedented attempt to combine European expertise and resources in the face of a global crisis. From support for the disease tracking system SORMAS in Ghana and Nigeria to direct budget support for the government of Bangladesh, Team Europe has disbursed some €26 billion in partner countries. As the EU starts to plan future aid spending through its new financial instrument—the Neighbourhood, Development and International Cooperation Instrument (NDICI)—the Team Europe approach appears to have become the default option for allocating development assistance.

But what does this mean in practice? How will the European financial institutions collaborate with bilateral donors at country level? Below we take a look at the first batch of proposals for Team Europe initiatives which will be launched in 2021 to decipher what they will look like in practice. We find that the proposals shed little light on how collaboration will work using the full arsenal of financial instruments and on the division of labour between partners. The proposals also seem to be heavily skewed towards climate-related activities leaving a dearth of initiatives in human capital. 

What is Team Europe?

In 2017, the European Consensus on Development reaffirmed the commitments by the EU and its member states to better coordinate their actions in partner countries, particularly in response to global challenges and their progress towards the sustainable development goals (SDGs). With the onset of the COVID-19 pandemic, this concept of “working better together” was pushed to the next level with the Team Europe approach. In this configuration, the EU, its member states (including their implementing agencies and development finance institutions), and the two European multilateral banks (the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD)) all contributed to the €40.5 billion committed to COVID-19 as illustrated in Figure 1.

Figure 1. Sources of Team Europe response to COVID-19

Figure 1. Sources of Team Europe response to COVID-19

Source: EU Global Response to COVID-19

What are the proposed Team Europe Initiatives?

Team Europe Initiatives (TEIs) are joint activities by the EU, its member states, and the European development finance institutions focused on a specific sector. The EU is currently preparing as many as 150 TEIs at the national, regional, and global levels, with the plan being to have two TEIs per partner country. Our analysis is based on the 49 proposed TEIs at country and regional levels, excluding those in the EU’s neighbourhood region, which are not currently available.

The proposed TEIs do not share a common framework, although the majority begin with a presentation of an issue in the partner country and then briefly describe the rationale for a coordinated European intervention to help tackle it. However, the level of detail of the intervention largely varies from one TEI to another, which renders a comparison challenging. For example, while the TEI for Togo on agribusiness clearly presents the project’s objectives, the participating member states, and institutions as well as the relevance of the activities to the country’s national development plan and the SDGs, the TEI for Timor-Leste is ambiguous in defining concrete targets and partners. Moreover, only a limited number of TEIs present an estimate of the costs of the interventions. Nevertheless, below we highlight trends in the geographical and sectoral distribution of the initiatives as well as the partners involved.

An even geographic distribution

Figure 2 shows that TEIs appear to be relatively evenly distributed among the three regions targeted by the European Commission’s Directorate General for International Partnerships: Africa (41 percent); Latin America and the Caribbean (35 percent); and the Middle East, Asia, and Pacific (24 percent). In Sub-Saharan Africa, we find that half of the initiatives focus on Western Africa (10 TEIs), followed by a third of the initiatives in Eastern and Central Africa (6 TEIs) and only 4 in Southern Africa. In the Middle East, Asia and Pacific region, South and South-East Asia (7) represents the majority of the TEIs, followed by the Middle East and Central Asia (4) region and finally East Asia and the Pacific (1).

A strong focus on climate

The vast majority of the TEIs are focused on the transition to a green economy. For example, in Ghana, the TEI aims to support the development of a green and circular economy as well as climate and environmental policymaking. In Honduras, the TEI looks at how to “tailor the EU Green Deal to meet the country’s needs, realities and priorities” and act as a “facilitator of the National Decarbonisation Strategy.” More broadly, the initiatives focus in equal measure on both climate mitigation and climate adaptation.

What is striking, however, is the absence of a focus on health and education, particularly in light of the destructive impact COVID-19 has had on human capital. Figure 3 shows that out of the 49 TEIs, not a single one is in health, while only three are in education.

Figure 3. Sectoral distribution of TEIs

Chart showing climate is by far the most common theme, and there are no TEIs in health

TEIs are dominated by a few major players

There are only a handful of prominent actors in the TEIs. France and Germany are the main champions, featuring in more than two-thirds of the 49 TEIs. They are followed by the European Investment Bank and Spain (see Figure 4). Several smaller member states, such as the Netherlands, Sweden, and Belgium are also listed in a few of the proposals.

While the TEIs are primarily built around the EU, its member states, and financial institutions, they are also open to non-EU bilateral and multilateral partners. Switzerland and Norway also feature in a few proposals. However, the United Kingdom is conspicuously absent from any of the initiatives.

Figure 4. Top partners for the TEIs

Figure 4. Top partners for the TEIs

Note: All other partners are involved in less than 15 TEIs

What have we learned?

The institutionalisation of the Team Europe approach is becoming a reality. Following proof of concept at the start of the COVID-19 crisis, EU delegations around the globe have successfully managed to build on this momentum to find ways for the EU and its partners to enhance cooperation and collaboration. However, we are none the wiser as to how this will work in practice.

Clearly, the EU is attempting to align its domestic and external policies with the focus on transporting the EU Green Deal beyond its borders. However, this appears to be at the expense of human capital—a remarkable choice, in light of the pandemic.

The main heavyweights in the driving seat are France and Germany together with the EIB. They are setting both the geographic and sectoral focus of the TEIs based on their own priorities.

Yet, questions remain: we are in the dark with respect to the costs of the interventions, which financial instruments will be deployed, and how the division of labour will take place.

Disclaimer

CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.