Merz Signals He Will Block EU Budget Unless Ukraine Aid Deal Is Reached

Friedrich Merz has signalled that he will block the European Union's next seven-year budget unless leaders reach a deal on financial aid for Ukraine, according to The Guardian.

The seven-year budget, formally called the multiannual financial framework, sets the bloc's spending limits over a long stretch of years. Merz has written that all member states need to contribute to a sound financial plan for Ukraine from 2028, in the context of that budget.

Slovak Prime Minister Robert Fico made a different charge. Speaking in Bratislava alongside Czech Prime Minister Andrej Babiš, he said what Merz is doing is "typical blackmail" and that he will not give in to it.

In a letter to European Council President António Costa, who chairs meetings of EU leaders, Merz wrote that bilateral assistance to Ukraine, meaning aid given directly by individual countries, is spread unevenly and carried mostly by a few member states. He also wrote that a collective commitment without exception is an essential precondition for resolving Ukraine's funding shortfall and for discussing any further matters with financial implications. He wants leaders to discuss Ukraine's financing needs at a summit in Dublin on Friday.

The scale of the gap is set out in several figures. The EU has agreed to lend Ukraine €90bn, intended to cover two-thirds of its military and civilian costs for 2026 and 2027. Ukrainian President Volodymyr Zelenskyy has called for €70bn to fill a budget shortfall. The EU has endorsed those figures and pledged to find €45bn, with other allies such as the UK and Canada expected to provide the rest.

An earlier effort to draw on Russian money also stalled. Merz led a push to use Russia's €210bn in sovereign wealth, meaning state assets, frozen in the EU, but opposition led by Belgium blocked the plan.

Several countries have stepped back from the funding. Hungary, Slovakia and Czechia opted out of the €90bn loan and have indicated they will stay out of the next funding round. Bulgaria has joined them in staying out, following the election of Rumen Radev as prime minister in April. The Babiš government rejects taking part in a future loan for Ukraine.

Germany, the largest net contributor to the EU budget, meaning it pays in more than it receives, wants steep cuts to the proposed budget for 2028 to 2034.