Merz Links EU Budget Approval to Universal Ukraine Funding Commitment
The German Chancellor has made his support for the next multiannual budget contingent on all EU members agreeing to close Ukraine's significant financial gap.
By Olga Menon ·
German Chancellor Friedrich Merz has declared that Berlin will withhold its approval of the European Union's 2028 to 2034 budget unless every member state commits to providing financial support to Ukraine. This condition was outlined in a recent letter addressed to European Council President António Costa. The German leader is positioning this requirement as a critical step toward resolving the bloc's immediate financial challenges.
Merz stated that a collective commitment from all EU nations to contribute fairly to closing Ukraine's financing gap is an essential prerequisite for moving forward with other discussions, particularly those involving financial implications. He emphasized that financial support from every member state is necessary to successfully complete the ongoing budget negotiations.
The timing of this ultimatum is strategic, as EU leaders are set to convene in Dublin on Thursday and Friday. Merz intends for the issue of Ukraine's funding shortfall to be a central topic during these meetings. These talks are occurring simultaneously with complex negotiations regarding the EU's future budget framework starting in 2028.
Germany currently stands as the largest net contributor to the EU budget. In contrast, four countries that have expressed reluctance to fund further assistance for Ukraine are net beneficiaries of that budget. These nations include Hungary, Slovakia, Bulgaria, and Czechia. By leveraging its status as a major financial contributor, the German government is seeking to secure both short-term and long-term funding for Kyiv.
Ukraine faces a substantial funding gap of approximately 70 billion euros for next year. Kyiv has indicated that this additional amount is required due to the scale of Russian aggression. This need for extra resources is also acknowledged by Ukraine's international allies. The European Union has pledged to cover two-thirds of this shortfall, which amounts to roughly 45 billion euros.
The European Commission is currently exploring options to fulfill this pledge, with a specific focus on issuing additional joint debt obligations. Brussels aims to reach an agreement on this matter by the end of the year. Last December, EU leaders had already agreed to provide Ukraine with a 90 billion euro loan, but the situation has evolved, necessitating further support.
Despite the EU's pledge, four member states have signaled their intention not to contribute to further financial assistance for Kyiv. Last year, Hungary, Slovakia, and Czechia secured an exemption from paying interest on the previously agreed 90 billion euro loan. Merz stressed in his letter that a solution supported by all member states must ensure a sound and multiannual financing perspective for Ukraine from 2028 onwards, including the handling of interest payments on existing debt.
Political dynamics within the bloc may complicate the process of reaching a consensus. Upcoming elections in several EU countries, including Italy and Poland, could make it more difficult to agree on funding mechanisms for Ukraine. The European Council previously instructed the Commission to prepare proposals for covering the 2027 budget shortfall at a summit held in October.
The interplay between the immediate need for Ukrainian support and the broader EU budget negotiations highlights the financial tensions within the union. As leaders prepare for the Dublin summit, the focus remains on whether a unified approach can be established to address both the current crisis and the long-term financial architecture of the European Union.
