Merz Threatens to Block Next EU Budget Unless All Fund Ukraine

German Chancellor Friedrich Merz has made Berlin’s backing for the European Union’s next long-term budget conditional on a collective pledge to finance Ukraine, according to a letter seen by the Financial Times.

In the message to European Council President António Costa, Merz warned he would block the bloc’s Multiannual Financial Framework for 2028–2034 unless all member states commit to supporting Kyiv financially in 2027 and beyond.

“A collective commitment, whereby all of us without exception will contribute fairly to covering Ukraine’s funding gap, is an essential condition for resolving this issue and for discussing any other matters, especially those with financial implications,” Merz wrote, according to the FT account republished by European outlets.

The warning lands ahead of an EU leaders’ meeting in Dublin later this week, where Merz wants Ukraine’s funding shortfall on the agenda.

€70 Billion Gap for 2027

Ukraine faces an estimated €70 billion financing gap next year, a shortfall Kyiv’s allies acknowledge. The EU has pledged to cover roughly two-thirds of that sum, about €45 billion.

The European Commission is examining options to meet the pledge, including further joint borrowing, with officials hoping leaders can agree a package by year-end.

In December 2025, EU leaders approved a €90 billion loan for Ukraine. Hungary, Slovakia and the Czech Republic secured an exemption from contributing to the interest payments on that facility.

Four governments — Hungary, Slovakia, Bulgaria and the Czech Republic — have now signalled they will not join further financial contributions to Kyiv, the FT reporting says.

Merz also pressed for a durable multi-year financing outlook for Ukraine from 2028, including the servicing of outstanding Ukraine-related debt.

That pressure comes as European capitals already face aid fatigue and a NATO military-aid shortfall for Ukraine.

Budget Leverage

Germany is the EU’s largest net contributor. The four capitals resisting extra Ukraine outlays are net recipients of EU funds.

A German government official said financial support for Ukraine from all member states is essential for the successful conclusion of the budget negotiations.

Berlin is also seeking to reduce the scope for national vetoes by moving future Ukraine-funding decisions toward qualified majority voting, according to a Clash Report summary of the FT report.

Slovak Prime Minister Robert Fico has publicly opposed linking Ukraine financing to the next EU budget, calling such a linkage “very dangerous.”

The clash coincides with political headwinds elsewhere in the bloc. Marine Le Pen, who leads polling for France’s 2027 presidential race, has said that if she succeeds Emmanuel Macron she would end most support for Kyiv beyond limited operational assistance and training.

Merz’s stance also follows his recent remarks that he would not shy away from speaking with Vladimir Putin if the Russian president attends the U.S.-hosted G20 summit, underscoring how Ukraine policy and European diplomacy remain tightly linked for Berlin.