FT: Germany issues an ultimatum to provide financial support to Ukraine
German Chancellor Friedrich Merz has tied Berlin's approval of the 2028-2034 EU budget to a commitment from all member states to provide financial support to Ukraine in 2027 and beyond.
As reported by Financial Times, in a letter to European Council President António Costa, Merz made Germany's support for the bloc's 2028-2034 budget conditional on all EU countries agreeing to fund Ukraine, which faces a €70 billion financing gap next year.
"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," Merz said.
This ultimatum comes ahead of a gathering of EU leaders in Dublin on Thursday and Friday. Merz insists that Ukraine's funding shortfall must be addressed during this meeting.
Discussions on funding Ukraine in the EU are taking place in parallel with fraught negotiations on the bloc's budget from 2028.
Germany is the largest net contributor to the EU budget, while the four countries seeking to avoid further contributions to Ukraine funding are net beneficiaries of it.
By using Germany's financial leverage during budget negotiations, Merz is seeking to secure Kyiv's funding both next year and in the long term.
Upcoming elections in several EU countries, including Italy and Poland, could make reaching a consensus on funding Ukraine even more difficult.
"Financial support for Ukraine of all EU member states is essential in order to successfully complete [the EU budget negotiations]." Merz added.
Last December, EU leaders agreed to provide Ukraine with a €90 billion loan. However, due to the scale of Russian aggression, Kyiv stated that it would need an additional €70 billion in funding next year. This gap is also recognised by Ukraine's allies.
The EU has promised to cover two-thirds of this amount, or about €45 billion. The European Commission is working on options to fulfil this pledge, specifically considering the possibility of issuing additional joint debt obligations. Brussels hopes that leaders can agree on a deal by the end of the year.
However, four EU countries – Hungary, Slovakia, Bulgaria and the Czech Republic – have signalled they will not contribute to further financial assistance for Kyiv. Last year, Hungary, Slovakia and the Czech Republic obtained an exemption from contributing to the interest payments on the €90 billion loan.
In his letter, Merz stressed that "we must then find a solution supported by all member states that ensures a sound and multiannual financing perspective for Ukraine from 2028 onwards", including interest payments on the country's outstanding debt.
At the leaders' summit on 15-16 October, the European Council instructed the European Commission to prepare proposals for closing the €70 billion shortfall in Ukraine's budget for 2027.