Alexander De Croo, the former Belgian prime minister who now leads the United Nations Development Programme (UNDP), is calling on European policymakers to treat defense spending and international aid as inseparable components of continental security—a perspective that could reshape how Brussels allocates its next multi-billion-euro budget cycle.
De Croo, who served as Belgium's prime minister from 2020 until December 2025 when he assumed UNDP leadership, used his platform at the EU Annual Budget Conference this month to argue that prosperity within Europe's borders depends just as heavily on stability beyond them. His message: economic growth, democratic consolidation, and peace in neighboring regions directly influence the lives of residents across the bloc, making development assistance a strategic investment rather than optional charity.
Why This Matters
• Budget wars ahead: The European Commission has proposed a €2 trillion multi-year financial framework (2028-2034) that quintuples defense allocations to €131 billion, potentially squeezing traditional spending on cohesion, agriculture, and social programs.
• Aid under pressure: While the EU maintains its position as the world's largest humanitarian donor with an initial €1.9 billion earmarked for 2026, global needs are soaring (239 M people require assistance) even as other major funders pull back.
• Hard choices for Portugal: As a net recipient of EU cohesion funds and agricultural subsidies, Portugal could see its inflows shrink if defense spending crowds out redistribution policies—or face higher national contributions to cover the budget gap.
Defense Spending Surges Across the Bloc
The European Defence Agency estimates total EU defense investment will reach €454 billion in 2026, equivalent to 2.4% of the bloc's GDP. That figure represents a 20% jump from 2025 levels and reflects an accelerating shift in priorities driven by the war in Ukraine and what officials describe as an unpredictable global environment.
To bolster military production capacity, the EU is rolling out the European Defence Industry Programme (EDIP) with €1.5 billion allocated for 2026-2027, partly aimed at supporting Ukraine's armament sector. Several member states are already exceeding or targeting the 2% GDP defense threshold, a benchmark that was once considered ambitious but is now routine.
This militarization push has triggered alarm among political factions who worry about the trade-offs. The Portuguese Communist Party (PCP), for instance, has advocated cutting allocations for military buildup and redirecting those resources toward cohesion, economic development, and poverty reduction—a stance that underscores the ideological friction embedded in the upcoming budget negotiations.
What This Means for Residents
For people living in Portugal, the debate over defense versus aid is not abstract. The country currently receives approximately €20-25 billion from the EU's 2021-2027 budget cycle, making it one of the bloc's largest per-capita beneficiaries of structural funds. These resources finance everything from highway upgrades to vocational training programs. If the next multi-year framework tilts heavily toward defense—potentially "more than doubling" the share of the budget devoted to competitiveness, defense, and security—traditional pillars like the Common Agricultural Policy (CAP), the European Social Fund, and cohesion transfers may "lose weight" in relative terms.
Even if nominal spending increases, Portugal's slice of the pie could shrink. European Commission President Ursula von der Leyen has warned that the bloc will need €66 billion annually in new revenue for the 2028-2034 cycle. Without fresh income streams, member states face a binary choice: accept higher national contributions or agree to significant cuts in non-defense areas.
For Portuguese households and municipalities, this could translate into delayed metro expansions in Lisbon and Porto, reduced EU co-financing for renewable energy projects, smaller agricultural payments to the estimated 260,000 farmers who rely on CAP subsidies, or scaled-back social programs at a time when inflation and cost-of-living pressures remain elevated.
The UNDP Chief's Argument
De Croo's thesis rests on the idea that security and development are not competing priorities but complementary strategies. Speaking in early July, he framed reconstruction efforts in Ukraine as a dual opportunity: consolidating peace while creating economic openings that prevent future instability. He has repeatedly stated that "war is development in reverse," arguing that faster post-conflict rebuilding reduces the likelihood of renewed violence and generates cross-border economic benefits.
During the UN Economic and Social Council's operational activities segment in early June, De Croo reported that the UNDP delivered $19.6 billion in assistance, reaching 1.1 billion people in 2025. Yet he also highlighted a troubling trend: Official Development Assistance (ODA) is declining globally, forcing the organization to impose budget cuts—more than $80 M in 2025 and an estimated $113 M in 2026.
His position as both a former European head of government and current UN administrator gives him a unique vantage point. As Belgium's premier (2020-2025), he signed a long-term security pact with Ukraine committing at least €977 M in military aid and 30 F-16 fighter jets through 2028. Now at the UNDP, he advocates for maintaining robust humanitarian channels, noting that the situation in Gaza is "dramatic" and requires greater access for relief organizations.
Regional Allocation and Global Context
The EU's 2026 humanitarian budget reflects both geographic priorities and political realities. Sub-Saharan and Central Africa will receive €557 M, while the Middle East (including Gaza, Iraq, Yemen, Syria, and Lebanon) gets €448 M. Ukraine's humanitarian needs are allocated €145 M, a figure that sits alongside much larger reconstruction and military support packages.
Hadja Lahbib, the European Commission's Commissioner for Equality, Preparedness, and Crisis Management, has acknowledged "unprecedented pressure" on the humanitarian system and called for mobilizing private-sector financing to complement public funds. This signals a recognition that traditional donor models may no longer suffice.
Collectively, the EU and its member states remain the world's top humanitarian donors. In 2023, their combined ODA reached €95.9 billion. Yet as defense budgets balloon and domestic fiscal constraints tighten, the risk of aid fatigue grows—even as the number of people in need climbs.
The Political Calculus
The European Parliament has attempted to protect flagship programs like Horizon Europe (research), Erasmus+ (education mobility), LIFE (environment), and EU4Health from what lawmakers describe as "excessively damaging choices." But the overall trajectory remains clear: defense is ascending, and traditional spending categories must adapt or accept relative decline.
For Portugal, the stakes are tangible. The country's economic convergence with wealthier northern neighbors has depended heavily on EU transfers. Any pivot that reduces cohesion funding or agricultural support could slow infrastructure modernization, weaken rural economies, and strain public services.
At the same time, Portugal's security interests align with broader EU concerns. Instability in the Sahel, migration pressures from North Africa, and the war in Ukraine all have direct implications for Portuguese ports, borders, and labor markets. A stable neighborhood, as De Croo argues, benefits everyone—but only if the budget framework can accommodate both hard power and soft power simultaneously.
Looking Ahead
Negotiations over the 2028-2034 financial framework are expected to intensify in the coming months. Member states will need to reconcile competing demands: defense hawks pushing for military autonomy, cohesion advocates defending redistribution policies, and humanitarian voices warning against abandoning global commitments.
De Croo's framing—defense and aid as "two sides of the same coin"—offers a conceptual bridge. Whether it translates into actual budget lines remains to be seen. For now, the EU is attempting to project strength abroad while managing deep internal tensions over who pays, who benefits, and what kind of union emerges from this inflection point.
