Germany Threatens EU Budget Veto Over Ukraine Funding Gap

German Chancellor Friedrich Merz has threatened to veto the European Union's 2028-2034 Multiannual Financial Framework unless all member states commit to a collective funding solution for Ukraine. In a letter to European Council President António Costa, Merz demanded a reliable multiyear agreement to close a projected €70 billion financing gap for 2027, with EU member states expected to cover two-thirds of that amount, totaling approximately €45 billion.

Merz, supported by nations including Denmark, Finland, the Netherlands, and Sweden, is pushing to merge the long-term budget and Ukraine aid into a single package. He also advocates for future financing decisions to be made via qualified majority voting to prevent individual states from blocking aid. This position is opposed by Poland and Slovak Prime Minister Robert Fico, who warned that linking the two issues could be "very dangerous."

To address the shortfall, European Commissioner for the Economy Valdis Dombrovskis is assessing a new loan backed by the EU's common budget. To mitigate risk, the EU intends to use frozen Russian central bank assets to recoup funds if Moscow refuses to pay reparations. However, Hungary, Slovakia, the Czech Republic, and Bulgaria have indicated they will not participate in new loans. The European Commission is preparing financing options ahead of a special summit at the end of the month, while Merz has requested the topic be prioritized at an informal summit in Dublin on November 13.