Merz Threatens to Veto EU Budget Unless All Members Fund Ukraine

German Chancellor Friedrich Merz has threatened to block the European Union's next seven-year budget unless every member state commits to helping fund Ukraine in 2027 and beyond. The Financial Times reported the threat, which appears in a letter to European Council President António Costa, ahead of an EU leaders' summit in Dublin on Thursday and Friday.

The move ties the bloc's long-term spending plans to Ukraine's finances. Because the budget needs unanimous approval, Germany's objection alone could stall it, according to Dagens.

What Germany is demanding

In the letter, Merz called a shared commitment from all members, in his words "all of us, without exception," a prerequisite for resolving the issue and for discussing other matters with financial implications, the Financial Times reported. The Kyiv Post, cited by Dagens, said Germany's backing for the 2028-2034 budget framework is now explicitly conditional on that pledge.

Merz also wants a solution, backed by all members, that guarantees Ukraine stable multiyear funding from 2028, including coverage of interest on Ukraine-related debt, according to the Financial Times. Berlin is further pushing for future Ukraine financing decisions to pass by qualified majority instead of unanimity, which would remove the chance of individual vetoes, the newspaper said.

Germany is the EU's largest net contributor to the budget, a position that gives its demands extra weight in the talks.

What the opposing governments say

Hungary, Slovakia, Bulgaria and Czechia have signaled they do not want to take part in further financial aid for Ukraine, according to the Financial Times and Dagens. The Financial Times noted that these four countries are net beneficiaries of the EU budget. Budapest, Bratislava and Prague had already received an exemption from contributing to the interest on the existing 90 billion euro loan, the newspaper said.

Dagens reported that Slovak Prime Minister Robert Fico recently confirmed that Slovakia and Hungary plan to sit out future financing rounds. He also sharply criticized folding Ukraine assistance into the EU's core future budget. According to Dagens, Merz's approach is meant to keep countries from enjoying the budget's benefits while avoiding shared security responsibilities.

The funding gap behind the dispute

Ukraine has said it will need an additional 70 billion euros next year, even after European leaders agreed last December to a 90 billion euro loan, the Financial Times reported. The EU has committed to covering about two-thirds of the new amount, or 45 billion euros. Dagens, citing Costa, said the EU typically covers two-thirds of Ukraine's financial needs.

The European Commission is examining options, including new joint debt, and aims to reach an agreement by the end of the year, according to the Financial Times. Its preliminary proposal for the 2028-2034 budget would mobilize up to 100 billion euros for Ukraine, while military support would continue through the European Peace Facility, Dagens reported. Brussels is also asking non-EU partners, including Britain and Canada, to increase their contributions, the outlet said.

What's at stake for the EU budget

The seven-year budget sets spending limits for areas such as agriculture, regional development and research, according to Dagens. A veto from Berlin could therefore hold up much more than Ukraine aid, and the Dublin summit will show how far other governments are willing to go to meet Germany's condition.

For Ukraine, the outcome decides how its 2027 shortfall is covered and whether it has predictable financing from 2028. For the EU, it tests whether a bloc that normally decides such matters unanimously can move toward qualified-majority votes on future aid.

What happens next

EU leaders are due to meet in Dublin on Thursday and Friday. The Commission is aiming for an agreement on Ukraine financing options by the end of the year, the Financial Times reported.

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Around Prague, based on reporting by Dagens.com, Il Sole 24 ORE