German Chancellor Friedrich Merz has sent a letter to European Council President António Costa effectively issuing an ultimatum: Berlin is prepared to block the adoption of the European Union's next seven-year budget for 2028–2034 unless all member states commit to funding Ukraine. According to Merz, supporting Ukraine, which faces a 70 billion euro deficit next year, is a "prerequisite" for concluding budget negotiations and discussing any other matters, especially those with financial implications.
The financial leverage of the largest donor
Germany remains the largest net donor to the European Union budget, and the Chancellor has decided to use this status as his main negotiating tool. In the letter, Merz emphasized that "a collective commitment by all of us without exception to make a fair contribution to covering Ukraine's financial deficit" must be a basic condition for resolving the budgetary issue. According to the Financial Times, cited by RBC, four bloc members are trying to avoid contributions to aid Kyiv while remaining net recipients of EU funds. Merz insists that the issue of eliminating Ukraine's funding gap must be resolved at the upcoming EU leaders' meeting in Dublin.
70 billion euros: The scale of Kyiv's needs
Ukrainian President Volodymyr Zelenskyy previously publicly stated that Ukraine needs 70 billion euros from the European Union for defense next year. Euronews reported that Brussels is trying to find these funds to finance Ukraine in 2027. According to the publication, due to intensifying Russian strikes, the previously agreed loan is no longer sufficient to cover Kyiv's needs, and there are currently no simple solutions within the EU to raise additional funds. Thus, Merz's ultimatum fits into the context of an acute financial crisis within the bloc over who should bear the burden of supporting Ukraine and to what extent.
Electoral risks and the search for consensus
The situation is further complicated by the upcoming electoral cycle in several EU countries. In particular, elections are expected in Italy and Poland, which could shift the political balance and complicate reaching a consensus on budgetary issues. Any new financial burden on national budgets during the pre-election period is perceived extremely painfully by voters, making the positions of those countries trying to avoid additional contributions even more rigid. Merz is essentially presenting the European Council with a dilemma: either all countries commit to funding Ukraine, or the EU's seven-year budget, upon which dozens of programs and projects depend, remains blocked.
What's next
A key moment will be the EU leaders' meeting in Dublin, where, at Merz's demand, the issue of covering Ukraine's financing gap must be resolved. If consensus is not reached, Germany, as the largest donor, is ready to use its veto power at the EU Council level, which would paralyze the adoption of the multiannual financial framework. For Ukraine, whose defense needs in 2027 are estimated at 70 billion euros, the failure of these negotiations means a further reduction in Western financial support amid the ongoing conflict.
