Merz Threatens to Block the EU Budget Unless Every Country Helps Pay for Ukraine

Germany’s Chancellor Friedrich Merz has warned that he will block the European Union’s next seven-year budget unless every EU country agrees to help pay for Ukraine. It is the strongest pressure Germany has put on its European partners since the war began, and it sets up a difficult fight at a leaders’ meeting in Dublin this week.

In a letter sent on 6 November to European Council President António Costa and European Commission President Ursula von der Leyen, Merz made Germany’s support for the EU’s 2028–2034 budget conditional on a joint promise from all 27 member states to close Ukraine’s funding gap. The Financial Times has seen the letter, and its contents were reported on 9 November.

Ukraine faces a financing shortfall of about €70 billion in 2027 alone, as Russia’s war continues into its fifth year. Merz is saying, in plain terms, that Germany will not sign off on the EU’s long-term spending plan until that gap is covered — by everyone, not just by a few countries.

What Merz actually said

Merz’s letter was direct. He wrote that a joint promise from all member states to pay their fair share was essential before any other budget talks could move forward:

“A collective commitment that all of us, without exception, will contribute fairly to closing [Ukraine’s financing] gap is an essential prerequisite for resolving this issue and for discussing any further matters, particularly those with financial implications.”

In other words, no agreement on Ukraine’s funding means no agreement on the EU budget. Merz also insisted that the future budget must include a solution, backed by all member states, that gives Ukraine a secure, long-term financial outlook from 2028 onwards — covering both new funding and the interest payments on loans already agreed.

A spokesperson for the German government told the Financial Times that “Ukraine’s financial needs need to be resolved in the framework of the next EU budget,” and that the participation of all member states was a necessary condition for successfully concluding the budget negotiations.

Merz has also made his wider case in public. “We must continue to support Ukraine. This is in the vital interests of all of us,” he said, according to The Guardian.

Why Ukraine needs €70 billion

Ukraine’s funding gap is not a small hole in a budget. The country is fighting a full-scale war that began with Russia’s invasion in February 2022, and the costs keep rising — paying soldiers, keeping hospitals and schools running, repairing power plants and other infrastructure hit by Russian strikes, and buying weapons and ammunition.

The €70 billion figure is the estimated shortfall for 2027 alone. It is the amount Ukraine will need above what it can raise itself and what has already been promised.

The EU has already stepped in once. In December 2025, EU leaders agreed a €90 billion loan for Ukraine. The EU has committed to covering about two-thirds of the 2027 gap — roughly €45 billion — but the rest still needs to be found, and the Commission is looking at ways to raise the money, including joint borrowing by member states.

European Commissioner for Economy Valdis Dombrovskis has expressed cautious optimism that the EU will decide to cover two-thirds of the gap. But cautious optimism is not a decision, and Merz is trying to force one.

The European Commission’s proposal for the 2028–2034 budget envisages mobilising up to €100 billion for Ukraine. That is still only a proposal, and it is subject to negotiation among all 27 governments.

Why Germany can block the budget

Germany is the EU’s largest net contributor — it pays far more into the EU budget than it gets back. That gives Berlin real weight in budget talks, but the real power in this case comes from the rules.

The EU’s long-term budget, formally called the Multiannual Financial Framework (MFF), sets spending limits for seven years across everything from farming and regional development to research and foreign aid. Adopting it requires unanimous agreement among all EU governments, plus the consent of the European Parliament. A single country can stop it.

That is exactly what Merz is threatening to do. Germany could prevent approval of the entire 2028–2034 budget simply by withholding its agreement.

Merz is also pushing for a change in the rules themselves. Germany wants future decisions on funding for Ukraine to be taken by qualified majority voting — where a large majority of countries is enough — instead of unanimity. That would stop individual countries from blocking Ukraine aid in the future. Changing the voting rule would itself require unanimous consent, so it is a difficult ask, but it shows how far Berlin is willing to go.

The four countries that do not want to pay

Not every EU country agrees that more money should go to Ukraine. According to the Financial Times, four member states — Hungary, Slovakia, Bulgaria and the Czech Republic — have signalled reluctance to take part in further financial assistance to Kyiv.

Hungary, Slovakia and the Czech Republic had already secured exemptions from contributing to the interest payments on the €90 billion EU loan agreed in December 2025. Now they, along with Bulgaria, are resisting fresh commitments.

Slovakia’s Prime Minister Robert Fico has been among the most outspoken opponents of new commitments, and on Tuesday he joined the Czech prime minister in criticising Merz’s demand for a collective commitment.

This is the split Merz is trying to close. His argument is that if only some countries pay, the system is unfair and unstable. If all countries commit, Ukraine gets a reliable flow of money and no single government can use its veto to cut it off.

For the countries that are reluctant, the argument runs the other way. They say their own budgets are under pressure, that they have already contributed, or that they disagree with the scale and direction of EU support for Ukraine. Hungary’s government, in particular, has repeatedly opposed new Ukraine aid packages.

What happens next

The first test comes this week. EU leaders are due to hold an informal meeting in Dublin on 12–13 November, and Merz has demanded that Ukraine’s funding shortfall be a primary topic there. The issue is also expected to return at the special European Council meeting on 26–27 November, where both the immediate 2027 gap and the broader 2028–2034 budget will be on the table. European Council President António Costa has already replied to Merz, promising a broad discussion of Ukraine’s funding at the Dublin meeting and putting the issue on the agenda of the special European Council on 26–27 November.

The timing matters for Ukraine. The talks in Abu Dhabi between Russia, Ukraine and the United States are running in parallel, and Kyiv needs to know that its finances are secure whatever happens at the negotiating table. A funding gap would weaken Ukraine’s position — in the war and in any talks about ending it.

For the EU, the stakes are just as high. The 2028–2034 budget covers far more than Ukraine: farming subsidies, regional development funds, research programmes and climate spending all depend on it. A veto by Germany would not just delay money for Kyiv — it would hold up the entire seven-year plan.

There are a few ways this could end. The most likely is a compromise: the reluctant countries agree to some form of contribution, or accept a formula that spreads the cost, in exchange for concessions elsewhere in the budget. Another possibility is that the EU finds a way to fund Ukraine outside the main budget, through joint borrowing or a separate mechanism — an idea the Commission is already studying.

What is less likely, for now, is that Merz backs down. He has tied his position to a written ultimatum, and he has a summit in Dublin to make his case in person.

Why this matters beyond Brussels

For most people, EU budget negotiations sound distant and technical. But this fight is about a simple question: will Europe keep paying to support Ukraine, and will the cost be shared fairly?

If the answer is yes, Ukraine can plan its defence and its economy with confidence, and Russia sees a united Europe that will not tire of the war. If the answer is no, or if the decision drags on for months, Ukraine faces a real risk of running short of money while still fighting — and Moscow will notice.

It also matters for the EU itself. The union has spent years arguing about how to pay for common problems — from the pandemic recovery fund to the green transition. Each time, the same question comes up: do all 27 countries share the burden, or do a few carry it while others opt out? Merz is trying to settle that question for Ukraine, and the answer will shape how the EU handles the next crisis too.

For Pakistan and the wider world, the outcome has a knock-on effect. A stable, well-funded Ukraine means less pressure on global food and energy markets, which have been shaken repeatedly since the war began. A funding crisis in Kyiv would do the opposite.

Frequently asked questions

What is the EU’s Multiannual Financial Framework?

It is the EU’s long-term budget, covering seven years at a time. It sets the maximum amount the EU can spend in each policy area, from agriculture and regional development to research, defence and foreign aid. The next one covers 2028 to 2034.

Why does the budget need unanimous agreement?

Under EU rules, adopting the long-term budget requires all 27 member governments to agree, plus the consent of the European Parliament. That gives every country a veto — including Germany, which is now threatening to use it.

How big is Ukraine’s funding gap?

Ukraine is expected to face a financing shortfall of about €70 billion (roughly $77–78 billion) in 2027. The EU has committed to covering about two-thirds of that, around €45 billion, but the rest still needs to be agreed.

Which countries are reluctant to pay more?

Hungary, Slovakia, Bulgaria and the Czech Republic have signalled reluctance to take part in further financial assistance to Kyiv, according to the Financial Times. Hungary, Slovakia and the Czech Republic already secured exemptions from interest payments on the €90 billion EU loan agreed in December 2025.

What happens at the Dublin meeting?

EU leaders meet informally in Dublin on 12–13 November. Merz has demanded that Ukraine’s funding be a primary topic. The issue will return at the special European Council meeting on 26–27 November.

Could Germany really block the whole EU budget?

Yes. Because the budget needs unanimous approval, Germany can prevent it from being adopted by withholding its agreement. That would delay not just Ukraine funding but the entire seven-year spending plan.

Conclusion

Friedrich Merz has turned a budget negotiation into a test of European unity. By threatening to block the EU’s 2028–2034 budget, he is forcing every member state to answer a question they have been avoiding: will all of Europe pay for Ukraine, or only some of it?

The Dublin meeting this week will show whether his gamble works. If the reluctant countries agree to share the cost, Ukraine gets the secure, long-term funding Merz is demanding — and the EU gets its budget. If they refuse, Europe faces a standoff that could hold up seven years of spending and leave Ukraine’s finances in doubt.

Either way, the message from Berlin is clear: Germany will not keep carrying the cost alone, and it will not sign a budget that leaves Ukraine’s future uncertain.

Sources

• Ukrinform: “Merz threatens to block EU budget unless agreement is reached on Ukraine funding – FT”
• The New Voice of Ukraine: “Merz threatens to block EU budget over Ukraine aid”
• Interfax-Ukraine: “Merz threatens to block EU’s seven-year budget if member states don’t commit to funding Ukraine – media”
• AIN: “Merz threatens to block the next EU budget unless all countries agree to fund Ukraine”
• EUalive: “Merz issues ultimatum on EU budget: Ukraine financing must be guaranteed by all members”

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This article is for general information and education only. It is not legal or financial advice.