After USAID: Europe’s Moment to Lead

How Europe can recalibrate strategy, improve delivery and invest in democratic resilience in the Western Balkans and Eastern Partnership

The 2025 closure of the United States Agency for International Development (USAID) has reshaped the global development landscape and created a strategic inflection point for Europe close to home. With Washington’s principal aid agency dismantled and most democracy and governance programs halted, the Western Balkans (WB6) and Eastern Partnership (EaP) – regions home to eight EU candidate countries – now face widening gaps in democracy support, civic resilience and institutional capacity. Europe cannot treat this as a temporary disruption. The withdrawal of US engagement removes a key pillar of democratic assistance at a moment when authoritarian and illiberal influence is rising.

Europe’s collective response should focus on three priorities:

1. Recalibrate for a generational US policy shift
   US assistance priorities have shifted structurally and are unlikely to reverse soon. Europe should recalibrate its development strategies for sustained US disengagement from democracy and governance sectors, while maintaining targeted cooperation with Washington on energy security and economic support.
2. Close the political and delivery gaps
   Europe already provides more Official Development Assistance (ODA) than the United States, but remains constrained by fragmentation and difficult coordination. A unified “Team Europe” approach – pooling EU, national governments and philanthropic resources – can deliver faster, more flexible democracy and governance support.
3. Invest in democratic resilience
   With US funding for democracy, media and civil society sharply reduced, the EU and European governments should provide long-term, reliable support for independent media, watchdogs and civic networks that underpin democratic resilience across the EaP and WB6.

The US assistance landscape after USAID: Implications for Europe

The overhaul of US development assistance has direct implications for European engagement in the Western Balkans and Eastern Partnership. In 2023, US total foreign assistance disbursed to these two regions totaled USD12.4 billion in bilateral assistance. By early 2025, of 258 USAID programs formerly active under the Europe and Eurasia Bureau, only 11 were maintained in Ukraine and just one in Bosnia and Herzegovina.

This stark reduction in programming coincides with the troubled integration of USAID into the State Department under Executive Order (EO) 14169 (“Reevaluating and Realigning United States Foreign Aid”), issued on 20 January 2025. Multi-year projects were cut midstream, seasoned staff dismissed and local partnerships severed. Programs were transferred without functioning monitoring or evaluation systems, and the abrupt closure of USAID’s public portals and databases erased decades of records. This loss of institutional memory has complicated coordination for European partners and undermined transparency.

The State Department, while inheriting responsibility, lacks the scale, institutional machinery and execution capacity that USAID once provided. Embassies now struggle to manage aid portfolios, and proposals to create a dedicated “development cone” remain stalled. As one USAID official put it, the administration “destroyed first and planned later,” warning of “generational damage” that reflects a deeply entrenched US withdrawal with long-term consequences for Europe.

Erosion of democracy and governance support

The sharpest impact of USAID’s dismantling is in democracy and governance programing – sectors critical to the EU’s enlargement policy and long-term neighborhood stability. In 2023, total US foreign assistance disbursed to the Western Balkans and Eastern Partnership countries reached USD370.8 million for democracy, human rights and governance (DRG) programs, excluding broad public sector policy and administrative management support. The vast majority of that funding has not been retained. As one former USAID democracy officer recalled, “democracy programs were target number one.”

The only significant continuity comes through the congressionally funded National Endowment for Democracy (NED) and its affiliated institutes: the National Democratic Institute (NDI), the International Republican Institute (IRI), the Center for International Private Enterprise (CIPE) and the Solidarity Center. Among them, IRI remains active in Ukraine, Moldova, Armenia and the Western Balkans. In Moldova’s 2025 elections, for example, it partnered with European counterparts to increase voter turnout, underscoring that some transatlantic cooperation in democracy programming endures.

Yet even where continuity exists, scale remains limited. According to a senior IRI official, the organization, which was dependent on USAID for 50% of its budget, lost 90 of its 95 programs worldwide when USAID and State funding collapsed, with only eight to 10 surviving under NED support in the EaP and WB6. The Trump administration’s attempt to block NED’s FY2025 funds – released only after a court ruling in NED’s favor – and the proposal to eliminate its funding in the FY2026 Presidential Budget Request underscore the institution’s political vulnerability.

A February 2025 German Marshall Fund survey of NGOs across Ukraine, Belarus, Armenia, Moldova, Georgia, Hungary and the Western Balkans found widespread disruption following the initial funding freeze. More than 70% of those surveyed reported that activities had been delayed or halted, 43% were preparing layoffs or reductions, and a further 16% had already cut staff. Two in three expected to operate only with major disruptions through the end of the year. The most affected sectors were media, human rights, rule of law and governance initiatives. Rebuilding these capacities would be far more difficult once they are lost.

Overall ODA levels are misleading and what USAID offered differently

Although the EU and its member states, together with the UK, Norway and Switzerland have collectively disbursed more Official Development Assistance (ODA) than the United States, these figures mask major differences in delivery and political impact.

While Europe’s financial footprint is larger, its aid remains fragmented. EU institutions and national donors often pursue divergent priorities and struggle to coordinate, resulting in duplication and critical gaps. The EU’s external engagement relies on several large-scale instruments. Yet these remain predominantly government-to-government in design. While not inherently problematic, this model poses challenges for areas such as civil society, democracy promotion and press freedom. In contrast, the European Endowment for Democracy (EED) is perceived by many stakeholders as engaging more directly and flexibly in these sectors. Recognizing these structural divergences is key to understanding why aggregate figures obscure the operational and political fragmentation within Europe’s assistance system.

USAID’s influence consistently exceeded its financial footprint.

• Flexible, long-term support for independent civil society: USAID uniquely provided institutional support to local civil society organizations (CSOs). This allowed grantees to fund salaries, rent and activities in line with their own organizational missions, rather than being constrained by prescriptive project frameworks. By contrast, European donors overwhelmingly rely on shorter-term, project-based, output-driven awards.

• Speed and responsiveness: USAID could pivot program funds within weeks, reallocating or modifying activities in response to crises. Comparable adjustments within EU systems typically required three to six months, even under urgent conditions.

• Decentralized mission structure: USAID’s programming was managed primarily through in-country missions and regional offices, staffed with comparatively larger teams of long-serving local professionals. These missions, often described as “semi-autonomous,” possessed delegated authority to adjust funding and priorities rapidly in response to evolving local needs. By contrast, EU delegations and national development agencies typically maintained closer coordination with Brussels and their respective capitals on approvals, operating with smaller staffs and enjoying less field-level discretion as a result.

• Localization and sub-granting: USAID institutionalized localization through three mechanisms: (1) sub-granting via intermediary support organizations such as the Black Sea Trust, Balkan Trust for Democracy, Prague Civil Society Center and the Fund for Belarus; (2) internal targets ensuring at least 60% of democracy funding reached local CSOs directly; and (3) “co-creation,” a participatory process empowering local actors to shape program objectives and activities. These intermediaries absorbed reporting burdens, allowing smaller organizations to focus on substance.

• Elections and political processes: The US was often the lead donor on election administration, results management and political-party development – areas in which European donors were comparatively cautious. European governments have the potential to scale multi-party assistance via already active actors, such as Netherlands Institute for Multiparty Democracy (NIMD) and German political foundations. This would require clear guardrails, for example, including all significant democratic parties, excluding advocates of violence/xenophobia, and providing technical assistance rather than party financing.

• Adaptable delivery models: Most USAID democracy programs were implemented through grants or cooperative agreements, rather than contracts. In this scenario, implementing technical officers had discretion to adapt projects without requiring new tenders or lengthy contract modifications. This approach was central to USAID’s agility and responsiveness. In restrictive environments, USAID uniquely used creative procurement mechanisms – switching from grants to service contracts or “contracts under grants” – to comply with local law, while still supporting local groups, particularly in non-permissive settings, such as Belarus and Azerbaijan.

• Coordination, influence and advisory role: USAID field missions regularly convened donor coordination meetings and designed programs that European donors later co-funded. Beyond funding, USAID staff acted as advisors to grantees on disinformation, security and organizational resilience as well as trusted sources of local information, often providing insights that even embassies missed. This engagement was crucial for pro-democracy actors operating in constrained civic environments, reinforcing USAID’s reputation as a donor and a partner.

With the loss of a long-standing US counterpart and declining democracy funding at EU and national levels, Europe’s ability to sustain engagement has weakened. While the EU and some national agencies are not directly comparable to USAID, drawing on aspects of its approach could still help strengthen Europe’s collective effectiveness across both regions.

Divergences in US and European values and approaches

Both Washington and Brussels have shifted development priorities toward economic growth and competitiveness – a drift that risks hollowing out Europe’s credibility as a defender of democratic governance.

US development debates have long centered on the balance between social sector aid and economic statecraft. Critics, including within USAID, argued that an emphasis on governance and civil society came at the expense of growth and trade, while others maintained that such programs built resilience and underpinned reform. Under the current administration, the former view has largely prevailed, although, energy, investment and trade assistance programs have been terminated too.

This recalibration is not unique to Washington. European development budgets have likewise shifted away from democracy-focused initiatives toward economic growth, innovation and competitiveness. Even mechanisms such as the EEA and Norway Grants – vital for sustaining civil society in the EU’s eastern flank and the Western Balkans – now channel most resources into economic and infrastructural projects. Additionally, several bilateral donors have moved development portfolios into trade ministries, reflecting a wider tendency to view aid through a growth and competitiveness lens.

With the United States now absent from these sectors, Europe has a clear rationale to reverse this trend and reassert its leadership in supporting democratic resilience. A modest increase in governance, media and civil society funding within existing envelopes would better align external action with treaty-based values – and serve Europe’s long-term interest in maintaining stable, democratic partners in its current surround.

For the EU, this realignment brings challenges and opportunities. In sectors such as energy security and economic assistance, transatlantic cooperation remains possible and desirable. Yet the retreat from democracy, human rights and governance removes a longstanding area of alignment.

The closure of USAID marks not only a loss of resources, but a shift in philosophy. Its Europe and Eurasia Bureau had deliberately aligned programs with NATO and EU enlargement objectives, creating natural complementarity with European agendas. As one former EU ambassador to the Western Balkans recalled, US engagement “placed a stone of certainty” under regional reform processes, making EU conditionality more credible because “when the EU and the US spoke with one voice, local actors listened.”

The erosion of that dual presence has weakened incentives for reform and accountability, leaving Europe without its longstanding partner and a key driver of progress. This makes it all the more urgent for the EU and national governments to assume a more proactive leadership role in these areas.

Authoritarian Competitors in the aid vacuum

The US withdrawal has opened space for authoritarian competitors – notably Russia and China – to exploit economic and informational dependencies across Europe.

The European Union is not only the largest provider of ODA across the Eastern Partnership and Western Balkans; it is by far the most economically interconnected partner. The Bertelsmann Stiftung and ECIPE Geoeconomic Interconnectivity Index (GEOII) shows that as of 2023, the EU outpaces Russia and China across 43 separate indicators in nearly every country in these two regions, particularly in trade, finance and policy linkages. In terms of financial interconnectivity, encompassing ODA and foreign direct investment (FDI), neither Russia nor China’s contributions are remotely comparable to the EU’s scope and scale of support.

Yet this quantitative dominance masks a qualitative challenge. The GEOII reveals that China and Russia have retained – and in some cases expanded – their influence in targeted domains. China has strategically leveraged infrastructure finance and state-backed firms to gain footholds in the Western Balkans, particularly through transport and energy projects designed to entrench Beijing’s presence.

On the other hand, Moscow relies less on ODA and FDI and more on entrenched dependencies, especially in energy and agri-food supply chains. These are reinforced by disinformation campaigns and political influence operations, which are relatively low-cost tools that Russia has deployed aggressively during election cycles across the region.

The September 2025 Moldovan elections offered a prime example of such tactics, with Russia attempting to influence results before, during and after the vote. In Armenia, according to interviewees, the collapse of USAID programs has left independent media vulnerable ahead of the 2026 parliamentary elections, giving space to Russian-backed outlets. Similar Russian influence tactics have taken hold in Georgia, Serbia, Bosnia and Herzegovina, North Macedonia and Montenegro.

The core risk is not that Russia or China will outspend the EU, but that they will weaponize economic and informational dependencies to erode trust, weaken institutions and empower illiberal actors.

Recommendations

1 . Plan for a generational U.S. policy shift, not a short-term pause

US foreign assistance priorities have fundamentally shifted, with lasting implications for Europe’s neighborhood and enlargement policy. Washington may remain a partner in select sectors, but its aid has become more transactional and less aligned with European objectives.

The dismantling of USAID marks a structural loss of expertise that will take years to rebuild, and Europe should plan on the assumption that US development policy will not revert quickly – even with a potential political shift in 2028. European institutions should adapt their planning accordingly, maintaining cooperation with Washington in overlapping areas, such as energy security and economic assistance to avoid a full decoupling of transatlantic efforts.

Meanwhile, “track II” channels of engagement between European officials, US think tanks, civil society actors and supportive members of Congress should remain open to sustain dialogue on democracy, media and governance.

2. Close the political and delivery gap – especially in democracy and governance sectors

Europe provides more ODA than the United States, but remains constrained by political fragmentation and slow delivery. The challenge is less about resources than coordination. EU institutions, member states and partners, such as Norway, Switzerland and the United Kingdom, pursue overlapping priorities but often operate in silos. A so-called Team Europe approach could pool resources and political will, aligning democracy, rule-of-law and media support across the Eastern Partnership and Western Balkans. By combining the EU’s scale with the flexibility of bilateral and civil society partners, such coordination could reduce duplication, signal shared resolve and give Europe greater strategic weight where US engagement has receded.

At the operational level, Europe should complement this political alignment with more adaptive delivery tools. Instead of short, projectized contracts tied to annual cycles, donors should fund multi-year partnerships with trusted civil society organizations, granting them greater autonomy and stability.

Regional intermediaries such as the Balkan Trust for Democracy (BTD), the Black Sea Trust (BST) and the Prague Civil Society Centers – programs belonging to the German Marshall Fund and historically supported by the US, Norway and Sweden – have long demonstrated how regional mechanisms can act quickly and flexibly. Embedding their lessons within a coordinated Team Europe framework would help Europe support programming that empowers local actors.

In parallel, the EU and European governments should broaden their funding base by engaging private foundations and corporations as partners in sustaining democracy, civic activism and media freedom. However, given that major European foundations have reduced their engagement in the Western Balkans, governments will need to take the lead in re-engaging philanthropy – through targeted outreach, co-financing models and visible political commitment – to attract private partners back into the region.

3. Sustain democracy and civic resilience as a pillar of European engagement

Shrinking US democracy assistance has left deep gaps in governance, civil society and media sectors – areas directly tied to the future success of Europe’s enlargement and neighborhood policies. The EU should provide long-term, consistent operational support to organizations that anchor democratic progress, including independent media, watchdogs and civic networks.

EU coordination with the National Endowment for Democracy (NED) and further support for the European Endowment for Democracy (EED) should be reinforced. Beyond regional mechanisms like BST and BTD, Europe should strengthen national-level organizations and engage remaining philanthropic actors with strong regional roots. For example, the Open Society Foundations (OSF), which, despite their formal withdrawal from Europe, continues to operate through partners such as the Renaissance Foundation in Ukraine, the Open Society Foundation–Moldova and the Western Balkans Foundation in Belgrade and Tirana.

Partnering with and sustaining these entities is essential for advancing enlargement efforts, defending pluralism and strengthening the democratic resilience of societies across the EaP and WB6.

Conclusion

USAID’s closure has ended decades of close operational complementarity between US and European development policy, leaving Washington with a leaner, more commercially focused model of engagement. This overhaul is unlikely to reverse soon, but it does not signal full disengagement.

The United States remains a potentially active and capable partner in areas such as energy security and economic resilience – domains where the EU not only has a strategic interest, but already leads in scale and delivery. Continued alignment in these sectors will remain essential to sustaining regional stability and balancing external influence.

For Europe, the challenge is now to assume a greater role in sustaining democratic reform, governance and civic resilience – areas where US retrenchment has been most severe. This need is urgent. Many local organizations and regional networks once supported through USAID have already scaled down or closed. Rebuilding such connections later would be far more difficult and costly than stepping in now. Targeted investments in proven regional and civil society networks can sustain the connective tissue of reform.

By coupling their leadership in energy and economic assistance with renewed support for governance and institutional resilience, Europe can collectively bridge the transatlantic gap and reaffirm its leadership in the Western Balkans and Eastern Partnership. Doing so is not only a matter of upholding values, but of protecting Europe’s own stability and security – and of shaping a more resilient, democratic neighborhood that strengthens the European project for the future.

About the author

Brandon Bohrn works as a project manager in the Europe’s Future program. His work centres around U.S.-German and transatlantic relations. Previously, he worked on the transatlantic team at the Bertelsmann Foundation in Washington, D.C.