Tuvalu is a Pacific island nation and one of the smallest countries in the world: four coral islands and five atolls with a surface area of 26 km² and a population of around 10,000. The country has a robust democratic tradition, with parliamentary elections every four years. Traditional culture is strong, with each family apportioned its own role in the community.

Tuvalu has no major natural resources except fisheries, and most of the population lives a subsistence lifestyle. The government budget is under pressure from declining remittances and public sector inefficiencies. While human development indicators are fairly good, the country is extremely vulnerable to environmental threats, including rising sea levels (as a result of climate change), increasing population density, unsustainable use of natural resources (linked to a decline in traditional resource management) and poor waste management and pollution control. The country is also vulnerable to natural disasters, especially tropical cyclones.

Key issues in EU-Tuvalu relations

EU cooperation in Tuvalu's development dates back to the 1970s, with an emphasis on the energy sector gradually shifting to social sectors (especially in the outer islands) and coastal protection.

As part of the current EU development cycle (2008-13), Tuvalu has been allocated a budget of € 5.4 M. The main focus (€ 4.4 M) is on the water and energy sectors, with the following key objectives: boosting capacity to achieve sustainable country-wide rainwater harvesting; establishing regulations for environment protection and waste management; and increasing the use of renewable energy.

The strengthened EU-Pacific Partnership, which Tuvalu has agreed to, includes the sustainable management of natural resources and environmental challenges as a major theme. EU development cooperation therefore seeks to ensure that all its activities support the environmental pillar of Tuvalu's development and poverty reduction, especially support for the implementation of the country's national sustainable development strategy, called "Te Kakeega II".