Merz threatens veto on EU budget over Ukraine

German Chancellor Friedrich Merz has warned that Berlin will not approve the European Union budget for 2028–2034 unless all 27 member states participate in financing Ukraine.

He laid out this condition in a letter to European Council President Antonio Costa, reported by the Financial Times on November 9.

“A collective commitment from all of us, without exception, to fairly share in covering the necessary financing gap for Ukraine is a prerequisite for resolving this issue and for discussing any others, especially those with financial implications,” Merz wrote.

The demand is directed at Hungary, Slovakia, the Czech Republic, and Bulgaria. All four countries are net recipients of EU funds, and all four have requested exemptions from the new Ukraine financing mechanism, according to Le Monde. In 2027, Ukraine’s financing gap will be 70 billion euros. According to Euronews, the EU has pledged to cover about 45 billion euros of that amount through an as-yet-unspecified instrument, on top of an already agreed 90 billion euro loan.

Merz wants to avoid a repeat of last December’s deal. Under its terms, Hungary, Slovakia, and the Czech Republic received exemptions from paying interest on the 90 billion euro loan.

“Support for Ukraine is a matter of our common European security, and therefore the burden of this support must be distributed in solidarity,” he wrote. He repeated this idea on Tuesday, November 10, at a press conference in Berlin with Hungarian Prime Minister Peter Magyar. “We must fully integrate policy on Ukraine into the EU budget,” Merz told journalists. The chancellor was backed by Manfred Weber, who leads the European People’s Party.

Slovak Prime Minister Robert Fico called the demand blackmail. “We have the same veto right as the German federal chancellor,” he said. Czech Prime Minister Andrej Babiš said Prague will not guarantee new borrowing and noted that the proposed budget for 2028–2034 already includes funds for Ukraine, according to bne IntelliNews. Magyar stated that “it is not good to link the European budget… with any other issues,” Le Monde reports. Bulgarian Prime Minister Rumen Radev said Sofia has no money for loans to Ukraine due to a budget deficit, but it will not block EU decisions on financing Kyiv, IntelliNews writes.

In his response, Costa promised that the Ukraine issue will be discussed in detail at an informal EU summit in Dublin on November 13, European Pravda reports. He left the financing decision on the agenda of a special European Council meeting on November 26–27, where leaders will also discuss the next long-term budget.

“We will consider this issue at a special European Council meeting on November 26–27,” Costa wrote. The European Commission has not yet presented options for managing these 45 billion euros. Financing for Ukraine in 2027 must be secured by the end of the year — this is also the deadline for the International Monetary Fund to allocate its contribution, Le Monde writes.

Not everyone in Brussels is sure Merz will follow through. One EU source told Le Monde that the letter sounded “more like a warning than a serious threat.”