Strategic EU Cambodia Partnership Delivers Fresh Reform Funding
The European Union and Cambodia have reinforced their long standing strategic partnership through a high level bilateral dialogue that unlocked more than $22 million in new funding to advance critical reforms. The agreement signals strong confidence in Cambodia’s reform trajectory and focuses on strengthening institutions, improving public service delivery, and reinforcing long term economic resilience. The dialogue took place at the Ministry of Economy and Finance in Phnom Penh and confirmed that the new funding will support priority sectors including education, fisheries, and public financial management, aligning development assistance with Cambodia’s broader growth and governance objectives.
High Level Dialogue Reviews Economic Trends and Reform Progress
The bilateral dialogue was co chaired by Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth and EU Ambassador to Cambodia Igor Driesmans. Discussions covered recent macroeconomic and fiscal developments in both Cambodia and the European Union, while also examining growth prospects, emerging risks, and trends in bilateral trade and investment. Both sides acknowledged Cambodia’s continued progress under Stage IV of the Public Financial Management Reform Programme, recognizing it as a central pillar for safeguarding macroeconomic stability and fostering inclusive and sustainable economic growth across the public sector.
Public Financial Management Reforms Anchor Long Term Stability
Cambodia’s Public Financial Management Reform Programme was highlighted as a cornerstone of national development efforts, aimed at strengthening fiscal discipline, transparency, and accountability. The reform agenda seeks to ensure that public resources are managed efficiently and aligned with policy priorities, supporting economic growth and social equity. Deputy Prime Minister Aun Pornmoniroth reaffirmed the government’s commitment, stating, “The Royal Government of Cambodia is strongly committed to successfully implementing the PFMRP to achieve budget credibility, financial accountability, budget policy linkages and performance accountability,” emphasizing that these reforms are essential to sustaining macroeconomic stability and long term development.
Trade Growth Outpaces Investment Inflows
Trade relations between Cambodia and the European Union were described as positive and expanding, with bilateral trade continuing to grow in 2025. Cambodian exports to the EU increased by 17 percent year on year up to October 2025, demonstrating resilient demand despite ongoing global economic uncertainty. However, both parties acknowledged that EU investment inflows into Cambodia remain relatively modest, highlighting the importance of accelerating reforms to further improve the business environment, strengthen investor confidence, and unlock higher quality investment opportunities.
Global Gateway Strategy Expands Sector Cooperation
Under the EU Global Gateway investment strategy, which promotes sustainable and high quality investments worldwide, the European Union is scaling up cooperation with Cambodia in priority sectors such as energy, water, education, and skills development. Both sides reaffirmed their commitment to accelerating reforms and deepening cooperation in the years ahead, ensuring that investment and technical support contribute directly to sustainable and inclusive development outcomes that benefit businesses and communities alike.
Over $22 Million Confirmed for Key Sector Reforms
Ambassador Igor Driesmans confirmed that in 2025 the European Union transferred €19.5 million, equivalent to more than $22 million, to the Royal Government of Cambodia to support reforms in education, fisheries, and public financial management. The funding is designed to strengthen institutions, enhance service delivery, and build long term economic resilience. Looking ahead, the dialogue also discussed plans for a new EU Cambodia cooperation initiative with France and Finland, focusing on tax reforms and public financial management to further enhance fiscal governance. Ambassador Driesmans noted, “By promoting transparency and sound public finance, including effective tax systems, we help build a predictable business environment that supports investment and long term economic growth.”
Conclusion
The EU Cambodia bilateral dialogue underscores the depth of their strategic partnership and the shared commitment to reform driven development. With more than $22 million in new funding, expanding trade ties, and a renewed focus on institutional strengthening under the Global Gateway strategy, both sides have signaled a clear intention to deepen economic cooperation. As Cambodia advances its reform agenda, continued engagement with the European Union is expected to play a vital role in enhancing fiscal governance, attracting investment, and supporting sustainable and inclusive growth in the years ahead.