German Chancellor threatens to block EU budget without Ukraine funding pledge

German Chancellor Friedrich Merz has threatened to veto the European Union's 2028-2034 budget unless every member state commits to closing Ukraine's projected €70 billion ($78.4 billion) financing gap, the Financial Times reported on Monday.

Letter to European Council President

In a letter to European Council President Antonio Costa seen by the newspaper, Merz made Germany's backing for the multiannual financial framework conditional on unanimous agreement to help cover the shortfall. "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," he wrote, according to the daily.

The warning comes days before EU leaders gather in Dublin for an informal summit on Friday, where Merz has insisted the shortfall must be addressed. Last December the bloc agreed a €90 billion ($100.7 billion) loan for Kyiv covering 2026 and 2027, but Ukrainian officials and allies say the scale of Russia's ongoing military campaign requires substantially more support.

Commission seeks year-end deal

The European Commission is examining options to cover roughly two-thirds of the additional need, or about €45 billion ($50.4 billion), with the goal of reaching a deal by year-end. Four EU member countries — Hungary, Slovakia, Bulgaria and the Czech Republic — have indicated they will not contribute additional funds, according to media reports.