![\"People](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/06\/1782492377_52_0x0.jpg\")
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Inauguration of the KfW-funded bike lane in Lima’s Pueblo Libre.<\/p>\n
Metropolitan Municipality of Lima<\/p>\n
Bike lanes in Peru. <\/p>\n
That seems innocent enough, but that simple phrase has stoked massive controversy<\/a> in Germany. Starting in 2020, Germany\u2019s Federal Ministry for Economic Cooperation and Development (BMZ) provided \u20ac44 million<\/a> to develop bike paths in Lima. The German state-owned bank KfW also helped finance the work toward a permanent cycling network in Lima.<\/p>\n All this is part of a larger project for sustainable mobility in the Peruvian capital, with anticipated benefits for economic development and climate protection.<\/p>\n Helping the environment was just one reason that Jeffrey Leandro Diaz\u2019s ex-girlfriend, Cecilia Melgar Bravo, was an avid cyclist. Their first date was a cycling date. Tragically, Melgar was killed in 2023 while cycling on a Lima road that lacked a bicycle lane. She was 26 years old<\/a>.<\/p>\n Since then, Leandro has carried forward her legacy as Lima\u2019s Bicycle Mayor<\/a>. In this voluntary role, his advocacy activities have included<\/a> bike lanes in high-risk areas and improvement of bicycle parking. Leandro also continues to cycle, both out of love and out of practicality, as cycling gets this biologist to work in 1\/3 of the time that public transport would. But he recognizes the risk before getting onto his bike: \u201cEvery day is like saying goodbye to your parents.\u201d<\/p>\n In Germany, aid critics have seized on the Lima bike lanes to suggest that German public money is being wasted on woke leisure projects far away, while public services within Germany are crumbling. In particular, the extreme-right Alternative f\u00fcr Deutschland (AfD) party has been astonishingly effective at inflating the cost of the German support, while diminishing its benefits. Indeed, the anti-development crowd has been more successful at stoking public interest in foreign aid than development professionals themselves.<\/p>\n Leandro understands the controversy. He feels that Lima\u2019s government should be allocating more than it is to bike lane construction and maintenance. At the same time, he recognizes that there are limited resources, and appreciates the external funding. He explains that the bike lanes will help Lima\u2019s economy as well as the environment, given the many hours residents lose in other forms of transport. And more importantly, \u201cthe bike lanes really save lives if they are constructed correctly.\u201d<\/p>\n Despite the life-saving benefits, this one case has come to symbolize the downward slide of Germany\u2019s foreign aid. In 2025, Germany spent 0.56% of gross national income<\/a> on overseas development aid (ODA). This was a significant reduction from 0.83% in 2022. (The global benchmark for rich countries is in between, at 0.7%.) <\/p>\n Other figures also show how dramatic the change has been. The BMZ budget<\/a> is now at its lowest level in 15 years, while humanitarian aid (administered through the Federal Foreign Office) has been slashed to half the 2024 level. The government has proposed another \u20ac500 million cut to development cooperation spending in the 2027 budget.<\/p>\n A Dramatic Change In Mood<\/p>\n There are many reasons that German support for development funding has tailed off in the last half-decade. From the Covid-19 pandemic to Russia\u2019s full-scale invasion of Ukraine to U.S. friction with NATO, the feeling has become entrenched that Germany, the world\u2019s third-wealthiest country, simply can\u2019t spare the money. The rising cost of living, including food price inflation, has hit many hard. And the specter of Russian military aggression has spurred much talk of pouring money into defense instead.<\/p>\n Rising alongside these global crises has been a populist movement focused on grievance and nationalism. Given this inward focus, \u201csolidarity in a broader sense in society in Germany is weakening in many ways,\u201d comments Stephan Klingebiel, who heads the Political Science Department at the German Institute of Development and Sustainability (IDOS). Against the backdrop of mounting far-right influence, \u201cDevelopment policy is an easy victim. People do not really understand what it is about.\u201d In previous coalition governments, development funding was supported across political aisles. But the rise of the AfD party has shaken that up.<\/p>\n The pull away from aid funding was boosted in the last two years by the extraordinary disruptions in the U.S., which dismantled its world-leading development agency<\/a> and transformed the government\u2019s approach<\/a> to foreign aid. \u201cIt definitely served as an example,\u201d observes Sandra Dworack, a policy adviser for essential services at Oxfam Germany. \u201cIt fuelled this already existing skepticism towards international spending.\u201d<\/p>\n This led to the situation where Germany \u201cbecame almost by accident the biggest donor,\u201d Dworack explains. In 2025, Germany spent just a hair more<\/a> on development than the U.S., leading to the unexpected situation where \u201cwe became the biggest donor while at the same time simultaneously cutting the development budget in the last two years.\u201d Rather than being proud of this new leadership role, it seems that German politicians are nervous, even a bit embarrassed, about it.<\/p>\n Behind The Numbers<\/p>\n In any year, Germany\u2019s ODA figure is many times smaller<\/a> than what the public believes the country is spending on development. It\u2019s a problem besetting a number of rich countries where the majority of people don\u2019t feel well off.<\/p>\n In Germany, in reality, even less is spent on overseas poverty reduction, climate, education and health projects than is suggested by that not-terribly-inspiring figure of 0.56%. This is because of some peculiar accounting. Like the U.K.<\/a>, for example, Germany includes \u201cin-donor refugee costs\u201d within its ODA figures. Essentially, money spent within Germany on accommodating Ukrainian refugees, for the first year after their arrival, gets counted toward overseas aid. So does the education within Germany of students from low- and middle-income countries.<\/p>\n Funding for those areas doesn\u2019t come from the federal agencies responsible for development cooperation or humanitarian aid, but from various state agencies. Yet they\u2019re reported as development funding. The upshot, according to Klingebiel, is that grants and loans for development from the federal development ministry and the foreign ministry account for only about half of the official development assistance figure. This financial and accounting tangle means that ultimately, much of what Germany reports as overseas development aid is neither spent overseas nor really about development. <\/p>\n Klingebiel believes that some cuts to development may be appropriate, if all federal budgets (with the glaring exception of defense) are also tightening their belts. But it should be proportionate, he argues. Instead, the chopping of development has been major.<\/p>\n The reshaping of development spending has not just been about shrinking the budget. It\u2019s also starting to involve a harder-nosed approach to German strategic interests. Think loans rather than grants, a focus on regions closer to Europe, and attempts to open up economic opportunities for German companies abroad. Klingebiel refers to what is now a \u201cnarrow short-term expectation that development finance resources should get back to German companies.\u201d Yet \u201cwe know from research<\/a>: if you try to tie aid to the procurement in donor countries, you will lose efficiency and effectiveness of aid.\u201d <\/p>\n One sign of this move toward perceived self-interest, Dworack says, is recent restructuring of BMZ to include an economic cooperation department and to reduce staffing in areas like education. Basic education overseas is an area where Germany has been a leading donor, but the country has decreased its contributions to education projects including the Global Partnership for Education and Education Cannot Wait. Dworack applauds Germany\u2019s commitment to continued funding for Education Cannot Wait until 2031, but notes that this funding comes at a lower level. \u201cWe made a calculation that the cuts alone to Education Cannot Wait by Germany could result in 2 million more children losing access to education in the most vulnerable situations.\u201d <\/p>\n Resistance Mounts, As The Effects Of Aid Cuts Become Clearer<\/p>\n Supporters of development are now fighting to halt further cuts, such as the 2027 budget proposal that will be handed over to the Bundestag (the German Parliament) in July. But this is an uphill battle. Oxfam Germany has a petition<\/a> urging an end to overseas aid cuts, especially given the effects on girls\u2019 schooling, women\u2019s health, and other aspects of gender justice. According to the organization\u2019s analysis, Germany\u2019s reduction by 1\/3 of its contribution to the United Nations Population Fund (UNFPA) between 2024 and 2026 could result in 90,000 more unsafe abortions by 2030.<\/p>\n The German NGO DSW, which focuses on young people in East Africa, is also seeing the effects of the aid cuts. \u201cOne of the most severe consequences\u2014one that directly affects our work\u2014is the large-scale dismissal of healthcare personnel, extending in some cases to the closure of entire clinics,\u201d explains Sebastian Tripp, the CEO of DSW. \u201cIn addition, there is a significant shortage of modern contraceptives and essential medicines, including treatments for HIV and AIDS. As a result, therapies are being interrupted, with dramatic consequences, for example for the prevention of mother-to-child transmission.\u201d<\/p>\n Dworack calls the government\u2019s framing a false choice \u201cbetween supporting people living in poverty and in crisis areas, and ensuring adequate spending on social sectors here in Germany.\u201d As she points out, \u201cDevelopment cooperation only accounts for a tiny fraction of the federal budget. And cutting here will not save the budget.\u201d Instead of hollowing out solidarity spending in other countries, she calls for imposing a domestic wealth tax\u2014which has also been floated in the U.K.<\/a> , and which previously existed in Germany. \u201cIt is a political choice at the end of the day to make those cuts to development cooperation and also to humanitarian aid,\u201d Dworack argues.<\/p>\n Germany\u2019s aid cuts may have already harmed it on the international stage. Some observers believe that they contributed to Germany\u2019s unprecedented defeat in this month\u2019s election for a temporary seat<\/a> on the UN\u2019s Security Council.<\/p>\n