German Chancellor Friedrich Merz has called a collective commitment to Ukraine financing an 'essential prerequisite' for resolving Kyiv's funding shortfall and discussing further matters with financial implications, drawing accusations of a 'textbook case of blackmail' from Slovakia's Robert Fico and opposition from three other member states.
Merz upped the ante in a letter to European Council President António Costa, seen by the Guardian, in which he wrote that 'a collective commitment … without exception' on fresh financing for Ukraine was an essential condition for 'discussing any further matters, particularly those with financial implications', effectively linking approval of the EU's 2028-34 budget to unanimous support for fresh Ukraine financing.
The EU has pledged to cover roughly €45bn of a €70bn shortfall Ukraine faces next year, on top of an existing €90bn loan from which Slovakia, the Czech Republic and Hungary secured exemptions. Merz said he did not want to repeat last year's opt-out arrangement. 'In my view, continuing down this path is not a good option,' he said at a press conference with Hungarian Prime Minister Péter Magyar in Berlin on Tuesday.
Slovak Prime Minister Robert Fico, speaking alongside Czech counterpart Andrej Babiš in Bratislava, denounced the move. 'What the chancellor is doing is a textbook case of blackmail, and I reject it,' Fico said, according to Euronews. 'We are a sovereign country. We are the Slovak Republic. We have our own views.' Babiš quipped that Merz 'probably doesn't realise' that the proposed EU budget already earmarks €100bn for Ukraine, funds that would not become available until 2028.
Magyar, whose meeting with Merz on Tuesday reflected a broader rapprochement after years of icy relations under Viktor Orbán, said he did not 'necessarily consider it the right approach' to link the EU budget with Ukraine aid. He cited Hungary's high public deficit as a reason not to commit to fresh joint debt. Bulgarian Prime Minister Rumen Radev also pointed to deficit levels, saying his country would continue support through other means such as energy flows.
The four objectors, Slovakia, Czechia, Hungary and Bulgaria, all belong to the 'Friends of Cohesion' group of 17 countries that want to protect cohesion and agricultural funds in the next budget, putting them on a collision course with the 'frugals', which include some of Ukraine's largest donors such as Germany.
The issue now ricochets into tortuous negotiations on the EU budget, where Germany, the largest net contributor, wants steep cuts and opposes generous funding for member states that refuse to chip in to Ukraine's financial needs. A German government official told the Guardian: 'Financial support for Ukraine of all EU member states is essential in order to successfully complete the MFF.' Berlin is also seeking to switch the decision-making process on funding Ukraine to qualified-majority voting.
Costa, who chairs the European Council, wants a deal on the budget by the end of the year before elections in France, Poland and Italy in 2027. His spokesperson confirmed receipt of Merz's letter without commenting on details, and said Costa would make time for interventions on Ukraine at an informal summit in Dublin on Friday, while Ukraine financing would be discussed at a special summit on the EU budget on 26-27 November.
Analysis
Why This Matters
- The EU is Ukraine's largest financial backer. A deadlock on the new €45bn loan would leave Kyiv facing a €70bn budget shortfall next year as Russia's bombardment continues, with no certainty of replacement funding.
- The dispute directly threatens the EU's 2028-34 budget, a seven-year spending plan that shapes everything from farm subsidies to regional development. Failure to agree would freeze hundreds of billions in EU spending.
- The standoff exposes a growing north-south and east-west split within the EU, with net contributors resentful of countries that demand cohesion funds while refusing to share the burden of Ukraine support.
Background
Germany, led by Friedrich Merz of the CDU, is the EU's largest net budget contributor and one of Ukraine's most generous military and financial backers. Last year, the EU agreed a €90bn loan for Ukraine after Merz's push to use frozen Russian sovereign assets was blocked by Belgium. That loan contained opt-outs for Hungary, Slovakia and Czechia. Those three countries, now joined by Bulgaria, want to stay out of the new round. The EU's next multiannual financial framework (MFF) must be agreed unanimously and is already the subject of intense negotiation between 'frugal' states seeking cuts and the 'Friends of Cohesion' group seeking to protect spending.
Key Perspectives
Friedrich Merz: Support for Ukraine 'is a shared European responsibility, not the responsibility of individual member states' and must be 'fully included in the European Union budget'. A collective commitment without exception is an 'essential pre-requisite' for resolving Ukraine's funding shortfall and discussing any further matters with financial implications.
Robert Fico: 'What the chancellor is doing is a textbook case of blackmail, and I reject it. We are a sovereign country. We are the Slovak Republic. We have our own views.' He said he can wield a veto just as Merz can.
Péter Magyar: Said linking the EU budget to Ukraine aid is not necessarily the right approach, citing Hungary's high public deficit. 'In this regard, this is obviously unacceptable for us for domestic political reasons.' He said he expects a solution will be found.
Andrej Babiš: Quipped that Merz 'probably doesn't realise' the proposed EU budget already earmarks €100bn for Ukraine from 2028.
Rumen Radev: Pointed to high deficit levels as a reason to exempt Bulgaria, saying his country would continue support through other means such as energy flows.
What to Watch
- The informal EU summit in Dublin on Friday, where Merz's letter will be discussed and leaders may reveal further splits or movement.
- The special summit on the EU budget scheduled for 26-27 November, which Costa wants to conclude by the end of the year, a hard deadline before 2027 elections in France, Poland and Italy complicate negotiations.
- Whether Berlin pushes for qualified-majority voting on Ukraine funding, which would remove the veto power that Fico and other objectors currently hold.
Checked
11 claims in this story checked against 3 sources: 10 supported.
Show each claim
- SupportedMerz linked the EU budget to Ukraine aid, prompting a blackmail accusation from Fico.Euronews: “Slovakia's Robert Fico accused the German chancellor of "blackmail" as four EU countries resisted his demand to link approval of the bloc's next long-term budget to fresh financial support for Ukraine.”
- SupportedThe summary says Slovakia, Czechia, Hungary and Bulgaria pushed back against Merz's demand.Euronews: “The leaders of Slovakia, the Czech Republic, Hungary and Bulgaria have pushed back against German Chancellor Friedrich Merz's ultimatum to make approval of the EU's next long-term budget conditional on fresh financial support for Ukraine.”
- SupportedMerz described a collective commitment to fresh Ukraine financing as an essential prerequisite for resolving its funding shortfall and discussing further matters with financial implications.World news | The Guardian: “In his letter Merz writes that “a collective commitment … without exception” is an “essential pre-requisite” for resolving Ukraine’s funding shortfall and “discussing any further matters, particularly those with financial implications”.”
- Partly supportedFico said, “What the chancellor is doing is a textbook case of blackmail, and I reject it.”Euronews: “"What the federal chancellor is doing is a textbook case of blackmail, and I reject it."”
- SupportedThe EU pledged roughly €45bn toward Ukraine's €70bn shortfall next year.World news | The Guardian: “The EU has endorsed Zelenskyy’s figures and pledged to find €45bn, with Ukraine’s other allies, such as the UK and Canada, expected to provide the rest.”
- SupportedThe existing €90bn loan had exemptions for Slovakia, Czechia and Hungary.Euronews: “The new funding would come on top of an existing €90 billion support loan, from which Slovakia, the Czech Republic and Hungary secured exemptions.”
- SupportedBabiš said Merz “probably doesn't realise” that the proposed EU budget already earmarks €100bn for Ukraine, unavailable until 2028.Euronews: “Babiš quipped that Merz "probably doesn't realise" that the proposed EU budget already earmarks €100 billion for Ukraine. However, those funds will not become available until 2028”
- SupportedMagyar said he did not “necessarily consider it the right approach” to link the EU budget with Ukraine aid.Politico Europe: ““I would like to note here — diplomatically and with all due respect as the Hungarian prime minister — that I do not necessarily consider it the right approach for the European budget, which is actually intended for seven years and for Europe,” to be “linked to other matters,” Magyar said.”
- SupportedMagyar cited Hungary's high public deficit as a reason it could not commit to fresh joint debt.Euronews: “Magyar said Hungary could not commit to fresh debt at the European level because it is already struggling to rein in its soaring public deficit.”
- SupportedSlovakia, Czechia, Hungary and Bulgaria belong to the Friends of Cohesion group of 17 countries seeking to protect cohesion and agricultural funds in the next budget.Euronews: “Slovakia, the Czech Republic, Hungary and Bulgaria all belong to the "Friends of Cohesion", a group of 17 countries that wants to protect cohesion and agricultural funds in the next long-term EU budget.”
- SupportedCosta's spokesperson confirmed receipt of Merz's letter, and Ukraine financing would be discussed at a special budget summit on 26–27 November.World news | The Guardian: “A spokesperson for Costa confirmed receipt of the letter without commenting on details. “President Costa will make time for interventions on Ukraine at the informal European Council in Dublin this week,” the spokesperson said, adding that Ukraine finance would be discussed at a special summit dedicated to the EU budget on 26-27 November.”
