The short version
- German Chancellor Friedrich Merz has signaled he will obstruct the EU's seven-year budget unless a unified agreement on Ukraine aid is reached.
- Slovakian and Czech leaders condemned the move as blackmail, maintaining their refusal to participate in new funding rounds for Kyiv.
- Berlin seeks to shift voting rules to qualified majority status to prevent single nations from blocking collective financial decisions regarding the war effort.
Tensions within the European Union have escalated sharply as German Chancellor Friedrich Merz indicated he would block the bloc’s upcoming seven-year budget unless a comprehensive deal on financial aid for Ukraine is finalized. This intervention has triggered immediate backlash from several central European leaders, who accused Berlin of employing coercive tactics to force compliance with its preferred funding strategy. The dispute sets the stage for contentious negotiations later this month, highlighting deep fractures in how member states view their obligations regarding the ongoing conflict in Eastern Europe.
Merz’s stance is rooted in a complaint that the burden of supporting Ukraine has fallen disproportionately on a small number of nations. In a letter to European Council President António Costa, Merz argued that bilateral assistance remains unevenly distributed and carried mostly by only a few member states. He emphasized that continued support for Kyiv is in the shared vital interest of all EU members. Consequently, he declared that a collective commitment without exception is an essential prerequisite for resolving Ukraine’s funding shortfall and discussing any further matters with financial implications.
The reaction from central European leaders was swift and hostile. Slovak Prime Minister Robert Fico, who maintains close ties with Moscow, described Merz’s actions as typical blackmail and stated he would not yield to such pressure. Speaking alongside his Czech counterpart, Andrej Babiš, Fico expressed confusion over the German chancellor’s position. Both governments have previously rejected participation in future loans for Ukraine, aligning themselves with a bloc of nations that are net beneficiaries of EU funds but resist contributing to Kyiv’s war effort.
The financial context for this dispute is complex and evolving. Last year, the EU agreed to lend Ukraine €90 billion, intended to cover two-thirds of its military and civilian costs for 2026 and 2027. However, intensified Russian bombardment has increased Kyiv’s expenses significantly. Ukrainian President Volodymyr Zelenskyy recently called for an additional €70 billion to fill a growing budget shortfall. The EU has endorsed these figures and pledged to find €45 billion of that amount, expecting other allies like the UK and Canada to provide the remainder.
Several member states have opted out of previous funding mechanisms and indicated they will remain absent from the next round. Hungary, Slovakia, and Czechia declined to participate in the initial €90 billion loan. Bulgaria has now joined this group following the election of a Moscow-friendly prime minister earlier this year. These nations argue that their contributions should not be mandated through coercive budgetary threats, creating a stalemate between northern donors and central European recipients.
Germany’s position is further complicated by its desire to reform EU decision-making processes. Berlin is seeking to switch the voting mechanism for Ukraine funding from unanimity to a qualified-majority vote. This change would prevent any single government from blocking collective financial decisions, addressing a frustration among northern member states who view themselves as the most generous backers of Kyiv. A German government official stated that financial support from all EU members is essential to successfully complete the multiannual financial framework.
The dispute also intersects with broader budgetary negotiations for the period 2028 to 2034. As the largest net contributor, Germany wants steep cuts in the proposed budget while opposing generous funding for member states that refuse to chip in to Ukraine’s needs. Merz’s letter explicitly linked the resolution of Ukraine’s financing to the approval of any further matters with financial implications, effectively holding the entire budget hostage to this specific issue.
European Council President António Costa faces the difficult task of brokering an agreement before the end of the year. He aims to finalize a deal ahead of elections in France, Poland, and Italy in 2027, which could further complicate the political landscape. A spokesperson for Costa confirmed receipt of Merz’s letter and noted that Ukraine finance would be discussed at a special summit dedicated to the EU budget on November 26 and 27. The outcome of these talks will likely determine the cohesion of European support for Kyiv in the coming years.
Previous attempts to leverage frozen Russian assets have also faced hurdles. Merz led an effort last year to use €210 billion of Russia’s sovereign wealth frozen in the EU, but the plan was thwarted by opposition from Belgium, which hosts most of these funds in Brussels. The failure of that initiative left the loan mechanism as the fallback plan, intensifying the pressure on reluctant member states to contribute directly rather than relying on seized assets.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗Merz accused of ‘blackmail’ by Slovak PM after demand for Ukraine aid in EU budget
