Category: Finance

Source: European Parliament

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on financing for development – ahead of the Fourth International Conference on Financing for Development in Seville

(2025/2004(INI))

The European Parliament,

– having regard to UN General Assembly Resolution 70/1 of 25 September 2015 entitled ‘Transforming our world: the 2030 Agenda for Sustainable Development’, adopted at the UN Sustainable Development Summit in New York and establishing the Sustainable Development Goals (SDGs),

– having regard to the Addis Ababa Action Agenda of the Third International Conference on Financing for Development held in Addis Ababa from 13 to 16 July 2015,

– having regard to the Paris Agreement of 12 December 2015, adopted at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change,

– having regard to the United Nations Declaration on the Rights of Indigenous People (UNDRIP) of 13 September 2007,

– having regard to the document of the United National Conference on Trade and Development (UNCTAD) of January 2012 entitled ‘Principles on Promoting Responsible Sovereign Lending and Borrowing’,

– having regard to the United Nations Framework Classification for Resources (UNFC),

– having regard to the UN General Assembly Resolution 68/304 of 9 September 2014 entitled ‘Towards the Establishment of a Multilateral Legal Framework for Sovereign Debt Restructuring Processes’,

– having regard to the UN General Assembly Resolution of 10 September 2015 on the ‘Basic Principles on Sovereign Debt Restructuring Processes’,

– having regard to the report of the Organisation for Economic Co-operation and Development (OECD) of 10 November 2022 entitled ‘Global Outlook on Financing for Sustainable Development 2023: No Sustainability Without Equity’,

– having regard to the report of the Organisation for Economic Co-operation and Development of 5 September 2024 entitled ‘Multilateral Development Finance 2024’,

– having regard to the UN Secretary-General’s SDG stimulus to deliver Agenda 2030 of February 2023,

– having regard to UN General Assembly Resolution 79/1 of 22 September 2024 entitled ‘The Pact for the Future’, adopted at the Summit of the Future in New York,

– having regard to the partnership agreement between the EU and its Member States, of the one part, and the Members of the Organisation of African, Caribbean and Pacific States, of the other part[1] (the Samoa Agreement),

– having regard to the joint statement by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission of 30 June 2017 entitled ‘The new European consensus on development: Our world, our dignity, our future’[2],

– having regard to the Council conclusions of 10 June 2021 on enhancing the European financial architecture for development,

– having regard to its resolution of 17 April 2018 on enhancing developing countries’* debt sustainability[3],

– having regard to its resolution of 24 November 2022 on the future European Financial Architecture for Development[4],

– having regard to its resolution of 14 March 2023 on Policy Coherence for Development[5],

– having regard to its resolution of 15 June 2023 on the implementation and delivery of the Sustainable Development Goals[6],

– having regard to the EU Gender Action Plan (GAP III),

– having regard to the Youth Action Plan (YAP) in European Union external action for 2022-2027,

– having regard to Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU of the European Parliament and of the Council and repealing Regulation (EU) 2017/1601 of the European Parliament and of the Council and Council Regulation (EC, Euratom) No 480/2009[7],

– having regard to the Climate Bank Roadmap of the European Investment Bank (EIB) of 14 December 2020,

– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 1 December 2021 entitled ‘The Global Gateway’ (JOIN(2021)0030),

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Development (A10-0101/2025),

A. whereas Article 208 of the Treaty on the Functioning of the European Union (TFEU), dictates the reduction, and in the long-term eradication, of poverty as the primary objective of the EU’s development cooperation; whereas Article 21(2) of the Treaty on European Union (TEU) reaffirms its commitment to supporting human rights, preserving peace and preventing conflict, assisting populations, countries and regions confronting natural or man-made disasters, and to the sustainable management of global natural resources;

B. whereas Article 18(4) TEU calls on the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy to ensure the consistency of the Union’s external action;

C. whereas, at this critical juncture, with just five years remaining before we reach the 2030 target date for the SDGs, the increasing number of crises worldwide, the rise in extreme poverty and hunger, and the increasingly frequent and severe consequences of climate change have meant that, according to the 2024 UN SDG Report, only 17 % of the Sustainable Development Goals are currently on track to be achieved by 2030, despite progress in certain areas; whereas developing countries’[*] domestic revenue mobilisation remained low, due, among other factors, to illicit financial flows and also often corruption, causing crucial resources to be diverted from healthcare, education, and infrastructure development;

D. whereas more than 700 million people worldwide are living in extreme poverty, a figure that keeps increasing; whereas poverty disproportionately affects women and girls globally, and the gender-poverty gap persists to this day; whereas the wealth gap and inequality within and between countries is widening, hindering sustainable development;

E. whereas mobilising even a small fraction of global wealth for sustainable development remains difficult, with UN Trade and Development estimating that the annual SDG financing gap in developing countries* has increased to USD 4–4.3 trillion, representing a more than 50 % increase over pre-pandemic estimates and requiring an unprecedented mobilisation of financial resources, both public and private, at the global level, especially to tackle the climate crisis, biodiversity loss and rising inequalities;

F. whereas food insecurity has significantly risen as a result of Russia’s war of aggression against Ukraine, as well as due to the impact of other armed conflicts and is therefore a barrier of achieving the SDGs; whereas EU cooperation needs to tackle the challenge of food security effectively with partner countries in a sustainable manner;

G. whereas leading global donors in development cooperation are abandoning their commitments to finance sustainable development;

H. whereas it is estimated that, if Member States had met the commitment to devote 0.7% of gross national income (GNI) to official development assistance (ODA) since 1970, more than EUR 1.2 trillion could have been allocated for development cooperation, a figure that is likely even to be much higher when taking into account the remainder of donor countries worldwide;

I. whereas developing countries* face significantly higher borrowing costs, paying on average twice as much interest on their total sovereign debt stock compared to developed (higher income) countries, due to imbalanced global financial structures, but also due to the rating of country-specific risk factors, governance challenges or macroeconomic instability, which further exacerbates the finance divide;

J. whereas, according to the latest data, almost two-thirds of low-income countries in the world are currently either in debt distress or at high risk thereof, with over 100 countries struggling due to the combination of debt and interest; whereas low-income countries (LICs) spent nearly 20 % of government revenues on servicing external debt in 2023, up fourfold since 2013; whereas debt spending in over three-quarters of low income countries is several times the spending on public goods such as education, health, social protection, or climate change, thus creating one of the most important obstacles for global south countries to advance the SDGs;

K. whereas if indebted countries are also hit by a catastrophic external shock, such as a natural disaster, they often resort to further borrowing to pay for the reconstruction and recovery costs;

L. whereas developing countries* in debt distress are projected to face annual debt servicing costs of USD 40 billion between 2023 and 2025, severely constraining their fiscal space for essential public investments;

M. whereas achieving sustainable development requires more than just curbing debt solutions and securing external finance, it also involves strengthening the economic self-sufficiency of developing countries*, including through enhanced domestic resource mobilisation, qualitative investment-friendly policies, favouring the promotion of local entrepreneurship and local private sector growth;

N. whereas a fifth of the world’s population lives in countries with high levels of inequality and, according to data from 2023, the richest 1 % of the world owns 47.5 % of all global wealth, and the effective tax rates on the richest 1 % are often lower than the tax rates for the rest of the population;

O. whereas Climate Resilient Debt Clauses (CRDC) are clauses that can be added to loan or bond contracts and that are triggered by certain specified external catastrophic events, notably climate-related events, which allow the borrower to temporarily suspend debt payments;

P. whereas the structure of creditors is changing and becoming more complex, with private creditors and new bilateral creditors outside the Paris Club playing a much larger role; whereas China, in particular, issues loans under opaque conditions, which is why stronger international regulation and disclosure of this debt is necessary;

Q. whereas the upcoming Fourth International Conference on Financing for Development in 2025 presents a critical moment for the necessary reform of the global financial architecture and for addressing the growing financing challenges;

R. whereas the current international financial architecture is based on the Bretton Woods Agreements of 1944, which represent an architecture that today is incapable of meeting the needs of the 21st century multipolar world, specifically the needs of so-called Global South countries – characterised by deeply integrated economies and financial markets, but also marked by geopolitical tensions, growing systemic risks and the effects of climate change, and persists in upholding the existing power imbalance that favours countries in the so-called Global North;

S. whereas in order to address unsustainable and illegitimate debts, all governments must participate on an equal footing in the decision-making on debt crisis prevention and resolution, as well as different aspects of debt management, beyond creditor-dominated forums;

T. whereas an improved global financial safety net is necessary to deal with systemic risks and global financial, economic and health crises and shocks;

U. whereas indebted countries tend to avoid debt restructuring at all costs, i.e. to secure access to the financial market in the future; whereas in order to make external debt payments possible, governments tend to implement harsh austerity programmes, on many occasions following the IMF assessment;

V. whereas conditionalities imposed by the IMF and some multilateral development banks (MDBs) are focused on fiscal consolidation and market solutions, thus limiting public investment to advance the SDGs; whereas the ultimate consequence of austerity programmes is a deep breach of people’s human rights in the Global South; whereas the G20 Common Framework has done little to solve those limitations, since priority is given to debt rescheduling and reprofiling;

W. whereas tax resources as a share of GDP remain low in most developing countries*, which are confronted with social, political and administrative difficulties in establishing a sound public finance system, thereby making them particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations;

X. whereas globalisation creates both opportunities and challenges, as in the case of the increased prevalence and size of multinational enterprises and changes in business models that may enable base erosion and tax avoidance and profit shifting on a significant scale, severely undermining domestic revenue collection, particularly in developing countries*; whereas as a result, taxes on corporate profits have been declining around the world; whereas international tax cooperation needs more solidarity to address national and global challenges;

Y. whereas climate change has a negative impact on global sustainable development, exacerbating biodiversity loss, breakdown of ecosystems, natural disasters and extreme weather events, and disproportionately affecting historically marginalised groups, in particular women;

Z. whereas development aid is increasingly being militarised, with funds originally intended for poverty eradication and social progress being diverted towards migration control, security cooperation, and geopolitical competition;

Aa. whereas illicit financial flows out of developing countries*, challenges such as trade mispricing, loopholes in international tax rules and corruption continue to pose a serious obstacle, often undermining fair and inclusive development efforts, and impacting developing countries’* national budgets and social policy, thus severely reducing funds available for sustainable development; whereas responsible tax behaviour by multinational enterprises is an essential element of the principles of corporate social responsibility;

Ab. whereas the potential of taxing extractive industries to boost fiscal revenues is largely untapped in developing countries*, primarily due to inadequate global tax rules and the challenges of enforcing them, as transnational companies frequently employ tax avoidance strategies; whereas this challenge is all the more acute for low-income countries that are heavily dependent on natural resources for their economic development;

Ac. whereas current investment choices continue to diverge from the sustainable development goals, with vast capital flows supporting carbon-intensive industries, while funding for decarbonisation and the energy transition remains insufficient;

Ad. whereas Russia is expanding its foothold in developing countries* in Africa, most notably in the Sahel region, spreading anti-European propaganda and offering alternatives to European ODA through bilateral deals;

Ae. whereas the digitalisation of the economy has exacerbated existing problems relating to corporate tax avoidance and evasion, and the importance of ensuring fair and effective taxation of digital services;

Af. whereas the EIB, through its development arm EIB Global, has committed to increasing the impact of international partnerships and development finance outside the European Union, presenting an opportunity for an enhanced EU contribution to global sustainable development;

Ag. whereas the EIB has expanded its regional presence, including by opening new regional representation offices, such as the one in Jakarta, Indonesia, to strengthen engagement in south-east Asia and the Pacific;

Ah. whereas the EIB, through EIB Global, is committed to sustainable development, climate action and innovative investments in low- and middle-income countries;

Ai. whereas on 20 January 2025, the United States issued an Executive Order, enacting a 90-day suspension and reassessment of all foreign assistance programmes, including those administered by  United States Agency for International Development (USAID), and reaffirmed its withdrawal from the World Health Organisation (WHO) and the Paris Agreement, actions that have serious implications for humanitarian, health and climate initiatives in the Global South; whereas other countries, including some EU countries, also cut their global aid budgets, placing immense pressure on the international development and humanitarian sector;

Aj. whereas the US withdrawal from foreign assistance programmes puts the EU in a decisive position in global development cooperation and the EU should assess how to strategically address critical shortfalls, particularly in sectors where stability, economic development, and humanitarian support are at risk, while ensuring a coordinated approach with international partners;

Ak. whereas using regional multilateral development banks (MDBs) as a source of funding could lead to more balanced and equitable collaborations in support of efforts to reform the international financial architecture;

Al. whereas official development assistance (ODA) has been cut back in many countries, including in the EU; whereas in 2023 only five countries worldwide met or exceeded the UN target of spending 0.7 % of their GNI on official development assistance (ODA); whereas the EU collectively undertook to provide 0.7 % of GNI as ODA, and 0.2 % as ODA to least developed countries (LDCs) by 2030, reaffirmed in the Council conclusions of June 2024, in the European Consensus on Development and in the Council conclusions of 26 May 2015; whereas the successful mobilisation of further capital, both private and public, in addition to ODA and other existing forms of development finance, is critical;

Am. whereas the New Collective Quantified Goal (NCQG) agreed upon during the COP29 in Baku on 24 November 2024 includes commitments to mobilise at least USD 300 billion per year for climate change mitigation and adaptation in developing countries*; whereas the launch of the Baku-Belém Roadmap requires reaching at least an additional USD 1.3 trillion per year for development cooperation by 2035;

An. whereas the fragmentation of government approaches to sustainable development financing remains a challenge, with the OECD noting that better policy coherence is needed to align tax, budgetary and development policies;

Principles and objectives

1. Stresses the importance for the international community to utilise the opportunities presented by the 4th Financing for Development Conference (FfD4) in Seville to promote structural reform of the international financial architecture to democratise international development cooperation and create equal power sharing, and to call for equitable and inclusive development cooperation policies that support gender equality;

2. Calls on the EU as a key multilateral actor and its Member States to increase their efforts in development cooperation, increasing their presence, to improve the EU’s global credibility as a reliable partner and strengthen partnerships based on shared values;

3. Reiterates that EU development policy must be driven by the principles and objectives set out in the UN 2030 Agenda for Sustainable Development, the Paris Agreement and the Addis Ababa Action Agenda and must ensure the application of a human rights based and human-centred approach, in line with Article 208 TFEU, the European Consensus on Development, the GAP III, the YAP, and International Human Rights Law;

4. Acknowledges that the existing financial architecture presents ongoing challenges to preventing and addressing debt crises, highlighting the need to strengthen the tools available to promote responsible financing and long-term debt sustainability; considers that, in view of the insufficient progress towards the SDGs, the SDG financing gap, and the multitude of recent crises, the FfD4 is an urgently needed opportunity to set up a fair and efficient multilateral debt work-out mechanism, to help strengthen multilateralism, support systemic changes that address long-standing inequalities, define concrete commitments, reinforce the EU’s credibility as a development partner, as well as make substantial progress on ensuring stable financing for sustainable development worldwide; stresses that the mobilisation and effective use of domestic resources, underpinned by the principle of national ownership, are also essential for sustainable development;

5. Calls on the EU to take effective measures against the shrinking of civic space, and ensure civil society participation in the reform of the current structures for development finance;

6. Reiterates that at least 93 % of EU development policy expenditure must fulfil the criteria for ODA, and that at least 85 % of new actions should have gender equality as a principal or significant objective, and that at least 5 % should have gender equality as the principal objective;

7. Emphasises the need for a comprehensive, integrated and people-centred approach to development finance in line with the Bridgetown Initiative, which calls for liquidity and debt sustainability issues to be addressed, for democratisation of financial institutions and debt relief to be implemented, for development and climate finance to be scaled up and for private capital to be increased to achieve the SDGs; stresses the importance of strengthening cooperation with like-minded partners;

8. Calls for the EU to lead by example in reforming the international financial architecture to better meet the needs of the 21st century, characterised by deeply integrated economies, financial markets, and growing systemic risks;

9. Recalls the commitment taken at COP 29 in form of the Baku-Belem roadmap to mobilise USD 1.3 trillion per year for development cooperation by 2035; urges the EU and its Member States to work together with their partners towards achieving this goal on the global level, encouraging cumulative polluters to take their part in climate change mitigation and adaptation in developing countries*, as well as for loss and damages, through public concessional and non-debt creating instruments, in line with the ‘Baku to Belem Roadmap’ agreed at COP 29; emphasises in this context the need for private investment to provide the necessary funds;

10. Recalls that progressive taxation is pivotal to making progress on the ecological transition as well as on social and economic justice; stresses the need to look to new sources of financing, notably from sectors contributing the least to taxation while benefiting the most from globalisation, including those with the largest carbon and greenhouse gas emissions; in particular, calls for the exploration of innovative financing mechanisms, including market-based instruments and for contributions from sectors benefiting from globalisation, and establishment of specific taxes, to help finance global public goods, reduce inequalities within and between countries, contribute to climate objectives and support regional sustainable development; notes that growth, competitiveness and stability of developed economies is also a necessary precondition for increasing ODA financing;

11. Stresses the importance of policy coherence for development (PCD), including gender and climate goals, as a fundamental part of the EU’s contribution to achieving the SDGs; calls for mainstreaming development goals into all EU policies that affect developing countries*, taking into account their legitimate concerns as regards the impact from European legislation; welcomes the Global Gateway strategy and highlights the importance of any EU development initiative to comply with a rights-based approach and to be linked to human development at all times; insist that EU development initiatives should never contribute in any way to enhancing the debt crisis or increasing inequalities; stresses furthermore that PCD implementation is essential to address the structural causes of the Global South’s unsustainable indebtedness;

12. Stresses the importance of supporting enabling environments for civil society engagement through development programmes and ensuring their participation in decision-making processes on development aid, including ensuring an inclusive process in the FfD4, supporting civil society participation and access to negotiations and information, and support their role in monitoring and following up on decisions made;

13. Underlines that underinvestment in critical social sectors threatens progress towards meeting the SDGs and exacerbates inequalities, including gender inequality; stresses the need to close financing gaps in the provision of essential public services, including health, education, energy, water and sanitation, and building social protection systems;

14. Recognises the primary objective of EU development policy to be the reduction and, in the long term, the eradication of poverty, while also contributing to fostering sustainable economic, social and environmental development in developing countries*;

15. Emphasises that inadequate investment in agrifood systems continues to aggravate food insecurity; stresses that a strategic approach that ensures better alignment and synergy among the different sources of financing, particularly in developing countries*, is needed to address food insecurity and malnutrition;

16. Underlines the importance of fostering stronger, more inclusive multi-stakeholder partnerships that fully consider the views and standpoints of our development partner countries – at national, regional and local levels – as well as those of other stakeholders such as international institutions, development banks, non-governmental and civil society organisations, academia and think tanks; believes these development partnerships should be based on equality and tailored to reflect the capacities and needs of partner countries, as outlined in the European Consensus on Development; considers that, while financial support for partner countries is often essential, it cannot fully replace domestic efforts, but should complement them with the aim of catalysing economic growth, strengthening social protection systems and supporting investments in comprehensive human development, particularly education and job creation, which are key tools in eradicating poverty; underlines, in line with the principle of common but differentiated responsibilities, that partnerships should be grounded in mutual interests and shared values, prioritising sustainable development and the needs of people; stresses the importance of respecting human rights and ensuring a people-centred approach;

17. Stresses the importance of transparency, accountability and proper oversight, emphasising that all EU funding for development cooperation must be carefully managed and monitored to prevent misuse, diversion, or inefficiency, while ensuring that resources are directed towards projects and initiatives that achieve the greatest positive impact in terms of the SDGS;

Debt

18. In view of the increasing number of low-income countries in debt distress or at high risk thereof; calls for the opening of an intergovernmental process to set up a UN Framework Convention on Sovereign Debt to address responsible financing with the purpose of preventing and resolving unsustainable debts; urges the EU and its Member States to support this process, to ensure fair burden-sharing among all creditors, including multilateral development banks, where necessary, without jeopardising MDBs’ financial health, to deal in particular with problems such as enormous delays in implementing restructurings and the lack of a common understanding and enforceable rules as regards the comparability of treatment of official and private creditors;

19. Considers that the reform of the current debt structure should provide countries in the Global South with fair and lasting solutions to a crisis that is already having devastating effects on populations, particularly on women and the most vulnerable communities;

20. Believes that, in many cases, only general debt relief and cancellation of debt, free of economic policy conditions and accepted by all creditors, can put a country back on a sustainable path of financing, instead of deferring debt repayments; stresses the need to develop domestic legislation to enforce private creditor’s participation in debt restructuring deals;

21. Finds, however, that any such debt relief must be accompanied by internationally agreed principles on responsible borrowing and lending, including implementation and monitoring mechanisms, alongside enhanced transparency and accountability standards, capacity building and efforts to combat corruption; highlights that, in order to be effective, responsible lending and borrowing principles need to go beyond voluntary approaches; highlights in this context the importance of committing to international human rights, civic and civil society engagement;

22. Recognises that women are often overrepresented in the public sector, and thereby disproportionally vulnerable to and impacted by budget cuts; emphasises therefore the importance of including a gender perspective in debt collection;

23. Emphasises the need for enhanced international cooperation to address the changing creditor structure, where private creditors now hold more than a quarter of the external debt stock of developing countries*, and new bilateral creditors outside the Paris Club are involved in debt restructuring efforts, particularly in jurisdictions governing significant portions of sovereign debt, such as New York and the United Kingdom;

24. Stresses the importance of increasing public and grants-based finance for climate mitigation and adaptation, and that climate finance in the form of loans risks further aggravating the debt distress of low- and middle-income countries; notes that only 50 % of the EU’s total climate finance continues to be provided in the form of grants; urges the EU and all Member States to increase grant-based finance, particularly for adaptation, and especially for least developed countries and small island developing states*;

25. Calls for closer and stronger cooperation and coordination between the European Parliament, the European Commission, the European External Action Service and EU delegations, particularly in developing countries* in fragile contexts, in order to facilitate discussions and cooperation with relevant actors on the ground in order to identify the most effective projects;

26. Urges the UN member states to develop a harmonised framework to strengthen domestic sovereign debt restructuring laws across its member countries, with the aim of facilitating more efficient and equitable debt treatment;

27. Emphasises the need for greater policy coherence in addressing sovereign debt issues, aligning tax, budgetary, and development policies to effectively respond to cross-cutting challenges such as climate change and inequality;

Reform of the international financial architecture

28. Calls for an increase in the financing power of MDBs, and the expansion of their mandates to tackle global challenges;

29. Calls for grants and highly concessional financing of the ecological transition, in particular for mobilising more resources for adaptation and the operationalisation of the Loss and Damage Fund; in addition, believes that all public lenders – governments, MDBs and other official lenders, including the IMF – should include, in their contracts, state-contingent clauses that are tied to climate and other economic exogenous shocks;

30. Considers it necessary to guarantee new, additional, predictable funding that is readily accessible to women, indigenous peoples and the most vulnerable communities;

31. Calls for the implementation of a rules-based, automatic quota reallocation system in the International Monetary Fund (IMF) to better reflect the changing global economic landscape and ensure fairer representation of emerging economies, as well as low income and least developed countries; in the meantime, calls for IMF special drawing rights to be rechannelled to developing countries* and multilateral development banks (MDBs), in line with the Bridgetown initiative, the UN Secretary-General’s SDG Stimulus and the initiatives of the African Development Bank (AfDB) and the Inter-American Development Bank (IDB), and for such rights to continue to be regularly allocated; in line with the principle of common but differentiated responsibilities;

32. Underlines that EU financing must uphold the EU’s role as the world’s leading provider of development aid and climate finance in line with the Union’s global obligations and commitments; calls for sustainable financing models that prioritise resilience, reduce fiscal dependence and support structural transformation to prevent recurrent financial distress in developing economies*;

33. Welcomes the commitment to gender balance on executive boards of all international organisations in the Zero Draft on the FfD4 Outcome; supports the establishment of a joint committee for governance reforms in the Bretton Woods Institutions to enhance transparency, inclusivity, such as through a fairer representation in decision-making bodies and fair access to finance and diversity in leadership and staff;

34. Underlines that civil society organisations and smaller non-governmental organisations as well as churches and faith-based organisations are key development partners, since they work closely together with populations on the ground and are therefore better acquainted with their needs, and retain a presence after many other aid providers have withdrawn; calls for the adoption of guidelines on partnerships with churches and faith-based organisations in the area of development cooperation;

35. Recalls that the regulation of the financial system is essential to advancing towards the prevention and fair resolution of debt crises;

36. Calls for stronger regulation of global commodity futures markets, which is especially important for food and fuel products, and digital financial markets; stresses equally the need to encourage appropriate finance for social and environmental objectives, while discouraging the financing of high-carbon activities;

Private business and finance

37. Emphasises again the crucial role of the mobilisation of private finance to close the financing gap in achieving the SDGs and calls for more action to facilitate private sector involvement in development cooperation and to encourage companies to invest in less developed countries; recalls, however, that private sector investment and blended finance instruments have not always proven to be effective or sufficient in least developed and fragile states, especially in critical public services such as health, education and social protection, and they cannot fully replace public investment, thus requiring special attention from international donors, governments and MDBs; recognises, however, the potential role of enhanced public-private partnerships (PPPs), particularly in the field of technical and vocational training, upskilling and reskilling;

38. Recalls the need to promote investments in education and vocational training in order to prioritise sustainable job creation and contribute to achieving the SDGs; further notes that trade, investment and job creation are a vital part of EU engagement for development and are contributing to sustainable development;

39. Underlines the lack of transparency regarding the functioning of the Global Gateway in EU partner countries and absence of clear mechanisms for assessing its impact, particularly in fragile contexts where the Global Gateway may not apply; emphasises that there must be a continuous evaluation of the Global Gateway to assess its effectiveness and strategic direction;

40. Insists that a conducive business enabling environment is essential for private investment, including through the rule of law, transparency, good governance, anti-corruption measures, investor and consumer protection, and fair competition; calls on the Commission to monitor and further improve mechanisms that will provide a security guarantee for European investors, on the other hand, stresses the need to rebalance investors’ rights with obligations towards the host state i.e. by supporting the local economy through technology transfer and by utilising local labour and inputs, so as to ensure that FDI translates into wider socio-economic benefits for society; calls for further improved access to affordable financing for the informal sector, dominated by micro- and small businesses, often led by women; calls for scaled-up EIB guarantee programmes to financially support small and medium-sized enterprises;

41. Recalls that the security landscape is a decisive factor for investments and for sustainable development; highlights in this context the role and activities of religious institutions, women and all civil-society actors in conflict resolution and management, contributing to peace and security; more generally, emphasises the interconnectedness of development and security and stresses the necessity of further advancing a clearly defined nexus between development, peace and security;

42. Emphasises that blended public and private finance must be aligned with the SDGs, focusing on development and requiring frameworks and legislation that focus on sustainable business and finance, sustainability disclosure and transparency and the set-up of a global SDG finance taxonomy;

43. Calls on the EU to constructively engage towards the adoption of the UN Treaty on Business and Human Rights to regulate the activities of transnational corporations and other business enterprises and to allow victims to seek redress;

44. Calls for the establishment of a dedicated SDG investment facilitation mechanism supported by the international community to identify and develop investment-ready opportunities aligned with the SDGs in least developed countries, leveraging the UNDP SDG Investor Platform’s success in identifying over 600 investment opportunity areas in emerging markets; recalls that SMEs play an important role in achieving the SDGs and therefore need to be encouraged and incentivised by EU policies to actively participate in initiatives contributing to sustainable development in developing countries*; also urges the EU and its Member States to prioritise allocation of grants and concessional financing based on vulnerabilities, namely in LDCs, fragile or conflict-affected countries, and to engage in coordination with relevant stakeholders including civil society actors;

45. Urges the expansion of innovative financing mechanisms to mobilise private capital for SDG-aligned projects in LDCs and fragile states, emphasising the need to double current finance flows to nature-based solutions from USD 154 billion to at least USD 384 billion per year by 2025 to effectively address biodiversity loss, land degradation ecosystem destruction and climate change;

46. Stresses the importance of capacity building and technical assistance for LDCs to develop long-term viable and SDG-aligned projects, advance human development and improve their investment climates, thereby attracting more private sector investment in critical sectors such as renewable energy, healthcare, and sustainable agriculture;

47. Advocates the creation of a global risk mitigation facility consolidated within current UN-frameworks to address the higher perceived risks and borrowing costs faced by low- and middle-income countries; calls for the regulation of the credit rating system, which currently benefits countries in the Global North disproportionately over those in the Global South, which pay on average twice as much interest on their sovereign debt compared to developed countries, to address these higher perceived risks and borrowing costs;

48. Emphasises the need for clearly defined access to development finance for local and regional governments in partner countries to ensure more balanced and transparent allocation of resources; stresses that overly centralised funding structures risk reinforcing inefficiencies and the politically motivated distribution of funds; underlines that empowering local governments – many of which play a crucial role in delivering public services and fostering inclusive economic development – would enhance community-based investments, accountability and governance reforms;

49. Emphasises the need to promote PPPs and private investments, which drive economic growth and sustainable regional development;

50. Highlights that PPPs are needed to cover the financial gap for development objectives in partner countries, further notes that private sector investments also need to serve the development of local communities and encourage, in this context, investments in education and vocational training;

51. Highlights the special challenges faced by persons with disabilities and their families in terms of accessing development aid; calls for the special needs of persons with disabilities to be taken into account in development financing;

Tax cooperation

52. Welcomes the two-pillar solution for addressing the tax challenges arising from the digitalisation and globalisation of the economy, as agreed by the members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, as a step forward; takes note, however, that a group of developing countries* has expressed dissatisfaction with the outcome, highlighting concerns around equity and inclusivity within the OECD Inclusive Framework; regrets that Pillar 1 on reallocation of taxing rights has still not entered into force and calls for the acceleration of its implementation, ensuring a fair reallocation of taxing rights to market jurisdictions, particularly benefiting developing countries*; calls for the EU and its Member States to ensure that the agreed global minimum corporate tax rate of 15 % for multinational enterprises is effectively applied, and urges the EU to support capacity building initiatives in developing* countries to effectively implement that minimum tax rate, ensuring they can benefit from the new rules and increase their domestic resource mobilisation;

53. Urges the international community to take concrete steps in the creation and implementation of a UN Framework Convention on International Tax Cooperation; takes the view that this UN Convention on Tax should be designed with a view to ensuring a fair division of taxing rights between nation states, and, while duly considering national tax sovereignty, support efforts to tackle harmful tax practices and illicit financial flows; stresses, in this context, that the EU should play a proactive role in enabling developing countries* to mobilise domestic resources, in particular through enhanced tax governance, and that the EU should take the lead in combating illicit financial flows;

54. Advocates further assistance for developing countries* and international cooperation for the purpose of strengthening tax systems, transparency and accountability in public financial management systems and of increasing domestic resource mobilisation, including through the digitalisation of tax systems and administrations;

55. Supports the decision of G20 finance ministers to ensure that ultra-high net worth individuals are taxed effectively; considers that Brazil’s initiative at the latest G20 summit for a coordinated minimum tax on ultrahigh net worth individuals equal to 2 % of their wealth, which it is estimated would raise up to USD 250 billion annually, is worth further consideration;

56. Emphasises the need to continue working on efforts to combat illicit financial flows, in particular out of low- and middle-income countries, and corruption, inter alia by investing in human capacities and skills, digitalisation, building up accessible and interoperable data, strengthening governance structures, enhancing regulatory frameworks and promoting regional cooperation;

57. Recalls that the extractive sector in Africa is particularly prone to illicit outflows; takes the view that the review of tax treaties should aim to strengthen the bargaining position of host governments so they can obtain better returns from their natural resources and stimulate diversification of their economies; in addition, believes that the Extractive Industries Transparency Initiative (EITI) should be made mandatory and extended to focus not only on governments but also on producer firms and commodity trading companies;

58. Advocates the creation of a global beneficial ownership registry to enhance transparency and combat tax evasion and illicit financial flows, building on existing EU initiatives in this area;

Official development assistance (ODA) and financing development cooperation

59. Emphasises that, despite the EU and its Member States remaining the largest global ODA provider, accounting for 42 % of global ODA in 2022 and 2023, the collective ODA/gross national income ratio has declined from 0.56 % in 2022 to 0.51 % in 2023, falling well short of the 0.7 % target; calls for urgent action to address the cumulative shortfall in meeting the 0.7 % target; is alarmed by the worrying trends that further cut ODA in many Member States and in the EU budget as well as by other leading global donors, leading to a further increase in the global financing gap for development; encourages Member States to increase their ODA budgets in the light of the current geopolitical situation; stresses the need to use development cooperation efficiently, to invest more specifically in those partner countries that promote, among other things, democratic reform efforts, access to social security systems and economic self-reliance;

60. Rejects the idea that the traditional donor-recipient model has become obsolete and that ODA is no longer relevant; underlines that, despite evolving financing mechanisms and partnerships, ODA remains a vital tool for poverty reduction, addressing inequalities, and supporting the most vulnerable communities, particularly in fragile countries and LDCs;

61. Urges the EU and the Member States to prioritise reaching the immediate target of devoting 0.15 % of GNI to ODA for LDCs, and to take concrete actions to fulfil this commitment, with a view to rapidly scaling up efforts to achieve a level of 0.20 % of GNI as ODA for LDCs; notes that the impact of development finance also depends on the efficiency of implementation of funding;

62. Urges the Commission to increase efforts to implement the development finance objectives under the GAP III, namely that 85 % of all new actions integrate a gender perspective and support gender equality;

63. Regrets that women’s rights organisations receive less than 1 % of global ODA and SDG5 remains among the least-funded SDGs, although improvement on SDG5 has been shown to be a cross-cutting driver for sustainable development; reiterates that women-led organisations are often best adapted to respond to humanitarian crises; calls on the international community to set ambitious targets for funding to women’s rights organisations;

64. Expresses concern over the increasing trend of tied aid, which reached EUR 4.4 billion (6.5 % of total bilateral ODA) in 2022, and calls for measures to reverse this trend and ensure that ODA primarily benefits partner countries rather than donor economies;

65. Calls on the EU and the Member States to devote 15 % of their ODA to education by 2030;

66. Calls on the EU and the Member States to ensure that ODA includes long-term, sustainable funding for United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), guaranteeing access to essential services for Palestinian refugees and preventing further humanitarian crises;

67. Emphasises that education must remain a central pillar of EU development assistance, including continued support for UNRWA schools, which provide education to over 500 000 Palestinian children, ensuring their right to quality education despite ongoing displacement and conflict;

68. Stresses the need for a comprehensive approach to development financing, aligning the Neighbourhood, Development and International Cooperation Instrument (NDICI) – Global Europe with the SDGs and the Paris Agreement, while ensuring that the allocation of EUR 79.5 billion for 2021-2027 is used effectively to address global challenges; urges the creation of a system for Parliamentary oversight of NDICI-capital flows to ensure their alignment with the dedicated targets for development;

69. Reiterates the urgent need to rethink and reform global governance of international development cooperation given the suspension of USAID and reductions in global aid by countries such as the UK, Netherlands, Belgium etc.; stresses that reform to the international financial architecture must be underpinned by a commitment to multilateralism and fit for a more crisis-prone world;

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70. Instructs its President to forward this resolution to the Council and the Commission, the European Investment Bank and the United Nations.