German Chancellor Threatens to Block EU Budget Over Ukraine Funding

German Chancellor Friedrich Merz has threatened to block the European Union's next seven-year budget unless all member states commit to providing an additional 45 billion euros in funding for Ukraine. The funds are intended to cover part of Kyiv's increased economic needs in 2027.

The intervention further complicates negotiations for the EU budget covering the period from 2028 to 2034. Ukraine faces an additional funding gap of approximately 70 billion euros for the coming year, while EU governments disagree on the distribution of financial burdens and the issuance of new joint debt.

“A collective commitment that all of us, without exception, will contribute fairly to covering this gap is an essential prerequisite for resolving the issue.”

In a letter to European Council President Antonio Costa, Merz called on European leaders to collectively bear the cost of supporting Ukraine. He linked the long-term budget agreement directly to the securing of new financial resources.

Merz stated that a collective commitment from all member states to fairly cover this gap is an essential prerequisite for resolving the issue and discussing further matters, particularly those with fiscal implications.

The German side also seeks to ensure that negotiations for the next seven-year budget guarantee a stable and multi-year funding outlook for Ukraine from 2028 onwards, including the coverage of interest obligations on debts already created.

The intervention carries particular weight because Germany is the largest net contributor to the EU budget and the largest bilateral donor to Ukraine, strengthening Berlin's negotiating position.

The need for additional economic assistance is linked to the ongoing Russian invasion and extensive attacks on the country's energy and production infrastructure, which have increased the burden on Ukraine's finances.