ETTG Blog by Karim Karaki (ECDPM) and Niels Keijzer (IDOS) with the contribution of Damien Barchiche (IDDRI), Ben Katoka (IDDRI), Iliana Olivié (ETTG / Elcano), María Santillán O’Shea (Elcano) and Daniele Fattibene (ETTG)
From 31 June to 3 July, Sevilla will host the fourth United Nations Conference on Financing for Development (FFD4). This conference represents a pivotal moment for the global community to rethink its approach to financing sustainable development and climate action.
As the world prepares for this critical conference in unsettling times, it is important to emphasise that FfD4 is not an end in itself. Unfortunately the preparatory process in some member states and regions has been slow, owing to issues of coordination within countries (between e.g. foreign and finance ministries, resp. MoFA and MoFin) and between countries (building alliances – especially between donor countries and the so-called “Global South” – on key issues). Given the tensions and lack of progress witnessed in multilateral fora like COP29, there is a clear need for more space for dialogue, ahead of the third preparatory meeting and negotiations, to be held in mid-February. In view of the global setting, it is this dialogue that may pave the way to an ambitious and cohesive FFD4.
Based on its work on FfD4, the European Think Tank Group (ETTG) organised an informal and closed-door dialogue in Paris for EU and European policy-makers from foreign and finance ministries, complemented with key experts and civil society representatives. The exchange of ideas on key issues including inter alia debt, domestic resource mobilisation, the role of public development banks, revealed several key challenges that need to be addressed if the EU is to seize FfD4 as a key opportunity to present a united front and strengthen its partnerships with the Global South.
This blog highlights key dimensions which the EU should address if it wants to make FfD4 an opportunity to strengthen its alliances. To achieve this, the EU must articulate a clear strategic vision, move beyond incremental changes by addressing systemic issues such as power imbalances in the international financial architecture, and engage key stakeholders like Ministries of Finance to ensure effective implementation. Without bold leadership, pragmatic goal-setting, and trust-building, the EU risks missing a crucial opportunity to shape global financing for development and reinforce its geopolitical influence.
What are the EU strategic objectives being pursued through FfD4?
When approaching discussions on FfD4, the natural inclination is to focus directly on key topics, technical issues, and potential solutions, often framing these within the context of existing positions and perspectives. Yet, there is a noticeable lack of clarity regarding the strategic objectives that the EU and its member states are collectively pursuing through FfD4. The EU must demonstrate leadership in FfD4 negotiations proposing ambitious solutions that resonate with the expectations and frustrations of the Global South.
Europe’s collective objectives – communicated through a convincing and ambitious joint position – should ultimately guide its engagement and commitments, and where it wants to be particularly ambitious. How can the EU use FfD4 proactively as a platform to strengthen its alliances with the Global South, in a way that supports an ambitious FfD4 and many other upcoming international negotiations? How can it serve to better position the EU in multilateral fora, particularly in light of Trump’s re-election and the growing geopolitical divide? Is it an opportunity to facilitate initiatives like the EU’s Global Gateway? How can/should the FfD4 discussions inform and serve the EU thinking on the next EU’s Multiannual Financial Framework (MFF)? How can the EU distinguish itself from other donors, in a way that mitigates the in part antagonistic divide of Global North/donors and Global South?
Reflecting on and responding to some of these issues is even more important for Europeans, given the current political landscape and the populist and fiscal pressure on the EU member states’ development policies. Without a clear articulation of its strategic purpose, the EU and its member states will miss an opportunity to better position themselves, distinguishing themselves from other influential states and groupings and offering weight and support that align with their own objectives, and in a way that responds to Global South priorities. A more strategic EU vision for FFD4 is therefore essential, not only to maximize its impact but also to ensure it serves as a cohesive pillar of international development efforts in an increasingly fragmented geopolitical landscape. FFD4 is an opportunity for the EU to align its multilateral aspirations with pragmatic leadership, offering not only ideas but also actionable commitments that meet the pressing needs of developing countries.
Aiming for incremental changes vs. addressing systemic changes, and the cost of inaction
There is a common recognition that the EU cannot come to FfD4 with unambitious proposals, both for the EU’s position and self-representation as the largest ODA provider in the world and the fact that the conference takes place within the EU. Yet so far a more complacent business-as-usual narrative has been put forward in the discussions, which seems to suggest that progress has been made, with the support of the EU, and that more efforts should be put in keeping improving existing instruments and approaches. At the same time, what the Global South is seeking is not so much isolated improvements, but rather more fundamental and systemic changes that also address long-standing power imbalances. There is hence a mismatch of expectations, already known and clear from other recent negotiations like COP29, which when left unaddressed may further fuel tensions between Europe and the Global South.
One of the most contentious issues expected from FfD4 is the governance of multilateral institutions, particularly the Bretton Woods system, where the Global South demands to be better represented. This is the case of the IMF, where progress has been achieved (a 25th chair is intended for Sub-Saharan Africa and Europeans also promote better instruments and approaches), yet does not address systemic issues. This should also be understood in the current geopolitically fragmented context where donor countries may be even less inclined to cede influence in multilateral institutions and even less so since Trump’s re-election.
The above should not be an excuse as there is a high cost of inaction for the EU and others. Failure to address these governance issues now will likely lead to the emergence of parallel processes, driven by alternative power blocs where the EU and likeminded cooperation providers are absent. This could add to the global institutional fragmentation and undermine the legitimacy and effectiveness of Bretton Woods institutions. Today, there is still a choice for the EU to proactively push for reforming these institutions by acting as a first mover, and hence a political gain in addressing systemic issues – which may not be there once parallel systems are in place. Last, given that US leadership in several of these global challenges is expected to decrease, there is a need to reassess EU engagement in multilateral fora. A reality is that many states – with the EU frequently involved – are moving the emphasis from multilateralism to minilateralism, i.e. from building global consensus to supporting coalitions of the willing. What these new processes may offer in (potentially) increased efficiency, they lack in legitimacy, hence they should be used in a way to strengthen rather than bypass the multilateral system.
The stakes are high: without meaningful reforms, the multilateral institutions risk losing relevance in a world where debt crises, climate change, and other transnational challenges require coordinated action. FfD4 must therefore find a delicate balance between gradual progress and addressing the systemic concerns of the Global South to address today’s and future emergencies, whilst promoting alliance-building.
Going beyond rhetoric, towards actual actions
A recurring theme in the FfD4 process is the tension between ambitious commitments, political realities, and the risk of complacency. The zero-draft FfD4 outcome document calls for developed countries to honor their ODA commitments of 0.7% of gross national income (which is also one of the few instances where a quantitative commitment is mentioned in the text). Yet, several European member states have recently reduced their ODA budgets, and more cuts are likely – and in fact already planned by some – with reference to the current economic and political climate and competing budgetary demands. There is tension within ODA budgets too, with stronger demands on budgets to provide global public goods, address migration and promote investment, all drawing funds away from the initial objectives of reducing poverty and promoting growth in Least Developed Countries – thus quite literally leaving them behind.
There is merit in reaffirming agreed ODA commitments. Yet, if this disconnect between ambitious goals and practical feasibility becomes the norm in the FfD4 process, it risks further fueling tensions between Europe, other donors, and the Global South and in doing so, undermining the usefulness/relevance of FfD4 itself. Unrealistic commitments could erode trust and make it harder to build the consensus needed to tackle shared challenges. A pragmatic approach that balances ambition with deliverability is essential to avoid further polarizing the international development landscape. Clarity of allocation choices, transparency and refraining from making promises the EU cannot keep are among the elements required for its response.
Likewise, the EU and its member states must prioritize implementation and accountability. This means setting clear, achievable goals and ensuring that mechanisms are in place to monitor progress. To be effective, these mechanisms should be entrenched not necessarily at the UN but in whichever fora issues are dealt with. For instance, the common framework should be dealt with at the IMF level, with Ministries of Finance in the lead (as they have the competency and expertise to manage such issues). Without the involvement and buy-in of MoFin, commitments agreed in FfD4 are not likely to be implemented – so there is considerable merit in systematically involving MoFin in FfD4 discussions.
Seizing the Unique Opportunities of FfD4
Despite the above challenges, FfD4 offers unique opportunities that should not be overlooked. First, it has the potential to break down silos between various policy processes, such as those UN-led such as the climate and biodiversity Conference of Parties, World Bank/IMF annual meetings, and forums like the OECD, BRICS+, G20 and G7. By providing a comprehensive overview of financing needs and priorities, FfD4 can promote coherence across these platforms, ensuring that efforts in one area reinforce progress in others. Second, FfD4 is an opportunity to foster partnerships and strengthen alliances, while also navigating the complex dynamics between emerging countries and their least developed counterparts.
In a world increasingly characterized by geopolitical fragmentation, the ability to build trust and collaboration across regions is invaluable. Aside from discussing technical solutions and instruments, FfD4 should focus on trust-building, relationship-strengthening and consensus-making, which are critical for advancing shared development goals. To meet the expectations of the Global South, a key opportunity for the EU would be to work collaboratively and urgently on addressing systemic issues highlighted by other regions. One example is the African Group, with which the EU could advance proposals for FfD4 on issues such as debt, domestic resource mobilisation, illicit financial flows, and the role of private finance and MDBs and public development banks (including national ones).
Moving towards Sevilla
The Fourth Financing for Development Conference comes at a critical juncture for global cooperation. While the preparatory process has exposed significant challenges—ranging from a lack of strategic vision to mismatched expectations and political constraints—it has also highlighted the immense potential of FfD4 to drive progress on financing sustainable development. By bridging silos, fostering partnerships, and addressing systemic issues, FfD4 can serve as a catalyst for transformative change.
For the EU, FfD4 is not just another development conference—it is a pivotal moment to redefine its global influence, reinforce its credibility with the Global South. Failing to engage with ambition and strategic clarity risks sidelining the EU in an increasingly fragmented geopolitical landscape, where alternative power blocs could reshape key policy fields without European leadership. To maximise its impact, the EU must push beyond technical discussions and ensure that its commitments are both bold and deliverable, balancing systemic reform with pragmatic action. Leadership at FfD4 will determine whether the EU strengthens its alliances and multilateral standing or cedes ground to others in shaping the future of global development finance. The stakes could not be higher.
