Around the world, a funding and power vacuum is developing in the wake of drastic cuts to foreign aid from the United States. Billions of euros have vanished with little warning, forcing many civil society and development organisations to shut down, pause operations and furlough workers.
The decision by the Trump administration to gut the US Agency for International Development (USAID) and subordinate it to the State Department, which Trump loyalist Marco Rubio leads, holds particular significance in eastern and southern Europe. US support for civil society in countries such as Ukraine, Georgia, Moldova and Armenia has been a bulwark against Russia’s destabilising influence and the rise of illiberal domestic political forces.
Each of these countries finds itself somewhere on the path towards integration with the European Union. Improvements to rule of law and other essentials to democratic governance are a prerequisite to EU membership, which now risk further degradation.
That the Trump administration seems unconcerned with that danger marks a significant shift in longstanding US foreign policy. Founded in 1961, USAID was designed to counter Soviet influence and project American soft power.
Advancing US interests abroad
"It was launched with the idea of humanitarian aid not only as a moral responsibility, but also as a strategic investment in global stability," Christina Bache, a researcher at the Brussels School of Governance, told The Parliament.
USAID took on renewed significance after the Soviet Union collapsed, playing a major role in bringing newly established, post-Communist states into the western fold.
In Romania, the agency invested over $600 million (€552 million) in governance and anti-corruption efforts, trained 1,500 journalists and helped to strengthen democratic institutions ahead of Romania’s EU accession in 2007. Between 2015 and 2023, as Poland experienced democratic backsliding and a crackdown on press freedom under the government led by the national-conservative Law and Justice party (PiS), USAID supported independent media by providing funding and training.
"The idea was that people would become more favourable towards the West if they saw that America was providing humanitarian and development assistance," Bache said.
Beyond USAID itself, soft power allowed the US to exert pressure on the domestic politics of its Polish ally. In 2021, its president vetoed PiS-supported legislation that would have forced a US company to sell its stake in a media outlet.
About 40%, or $17.2 billion (€16.5 billion), of the USAID budget went to eastern Europe in 2023. Most of it was earmarked for Ukraine as a means of securing the country’s path towards democratic governance amid Russia’s full-scale invasion. The rest went to Moldova, Georgia and Armenia, primarily to support democratic institutions, infrastructure and independent media.
Most of these projects are now suspended.
"It remains uncertain how these programmes will continue, which is disastrous for a country at war with Russia," Paulina Milewska, a researcher for the European University in Florence, told The Parliament.
The halt in funding has already forced dozens of Ukrainian media outlets, which Milewska called the "only firewall against Russian propaganda,” to close or scale back operations. That could make the country more susceptible to Russian propaganda.
European response
Russia has welcomed the withdrawal of USAID from the region, describing the agency as "anything but an aid, development and assistance agency." That echoes the White House's rationale, which accused the agency of waste and abuse. Its budget accounts for around 1% of federal expenditure.
It's unclear what the Trump administration wants to do, if anything, with US foreign aid. The resulting soft power vacuum presents a danger, but also an opportunity for the European Union, which also uses funding as a means of promoting its interests abroad.
The EU has been a major player in supporting countries like Ukraine and Moldova. It has pledged €140 million in humanitarian aid to Ukraine in 2025, including €25 million for civil society, independent media and EU integration. That is still far less than what the US was providing.
Ukrainian President Volodymyr Zelensky has acknowledged a funding crisis, stating that his government will seek alternative financial support, including from the EU. At the same time, it is asking for military assistance, and EU and NATO members are looking for ways to put more money into their own defence.
France, Germany and the Netherlands have tightened budgets and scaled back foreign aid. European countries outside the EU, such as Switzerland and the United Kingdom, have taken similar steps. Dutch foreign minister Reinette Klever, who hails from the far-right PVV, announced the country would take a Netherlands-first approach with development aid.
"It’s the worst possible moment, given Europe’s geopolitical situation with Ukraine and its own security concerns," Milewska said.
A similar scenario is unfolding in Moldova, where the US has been the largest state donor. The funding suspension may throw off energy independence efforts and EU accession-related reforms.
The country faces parliamentary elections this year, heightening concerns about election interference. The pro-European government there has previously accused Russia of meddling in elections, and the loss of USAID support for media and election monitoring could play into Moscow’s hands.
The European Parliament on Tuesday approved a €1.9 billion support package to bolster Moldova’s socioeconomic reforms, democratic resilience and EU integration. The package, comprising grants and low-interest loans, aims to help Moldova navigate the fallout from Russia’s war on Ukraine. It also seeks to counter Russian hybrid threats targeting the country’s democratic institutions.
“This is our commitment to doing more and acting swiftly to support Moldova and our neighbours in these challenging times,” MEP Siegfried Mureșan (EPP) said in a statement.
The proposal awaits approval from the Council.
The European Commission has acknowledged that the EU cannot fully replace USAID funding. It also announced it will review the EU’s multi-billion-euro aid budget to ensure it aligns with the bloc's foreign policy priorities.
The recalibration takes on heightened urgency in the Caucasus, where Armenia finds itself in a precarious position. USAID funding included $8.5 million in direct assistance to more than 100,000 ethnic Armenians displaced by Azerbaijan’s 2023 military offensive in Nagorno-Karabakh.
Richard Giragosian, founding director of the Regional Studies Center, an Armenian think tank, described the cut in assistance as a “real humanitarian shock.”
The war strained Armenia’s long-standing alliance with Russia, particularly after Moscow’s peacekeeping forces failed to protect Armenian civilians. Seeking closer ties with the EU, Armenia now faces the challenge of navigating Russian influence in the absence of US support.
"We are worried about a vengeful Russia regaining its lost power in the region, and the cut-off of US foreign aid allows Russia to step in," Giragosian said.
As aid is a way to advance a country’s strategic interests, he fears support from Russia will be transactional and lean towards autocratic forces aligned with the Kremlin.
Such a scenario is already playing out in Georgia, whose EU membership is on hold due to democratic backsliding. The ruling Georgian Dream party, which has moved the country back towards Russia, has used the USAID cuts as a pretext to double down on an ongoing crackdown on foreign-funded NGOs. Proposed legislation would now specifically target media receiving outside support.
"The EU usually moves at a glacial pace," Giragosian noted. "The challenge now is to act quickly and address this emergency."
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