Merz Holds EU Budget Hostage Over €45bn War Bill

German Chancellor Friedrich Merz wants the European Union to put a €45 billion line item on the table, and he wants it there now. In a letter to European Council President António Costa seen on November 9, Merz asked for a discussion on plugging Ukraine's financial gap in 2027 to be pushed up the agenda. His figures: a Ukrainian budget shortfall of €70 billion, of which he says €45 billion will fall to the EU. "I ask you to place this issue as a matter of priority... at the forthcoming informal meeting of the European Council," he wrote.

The tone is that of a man dictating terms to a room he already owns. "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 wrote. Read it twice. Nothing else gets discussed until the war bill is signed.

The Ultimatum That Isn't, Or Is

The Financial Times reported that Merz is threatening to block approval of the EU's next seven-year budget, for 2028-2034, unless all member states agree to support Ukraine. Berlin's support for that budget, the paper said, directly depends on every capital agreeing to pay. RBC-Ukraine, citing the FT, called the letter an ultimatum. The Kyiv Independent disagreed: the letter, it said, issues no ultimatum. On the budget, the text only says: "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 the interest liabilities that have already accrued."

So the press can't agree whether the chancellor is threatening anyone. What nobody disputes is the structure: a seven-year budget for 450 million people, with Ukraine's war financing as the entry fee to the conversation.

Fair Shares of Someone Else's War

Merz talks of "shared vital interest" and an "indivisible responsibility shared by us all." He also complains that "bilateral assistance to Ukraine is distributed unevenly and carried mostly by only a few Member States." Germany, the base reporting notes, is the largest financial contributor to Ukraine in the EU, though it is also by far the EU's largest member state. On a per capita basis, several countries give more to Kyiv.

RBC-Ukraine, citing the FT, says Germany remains the EU's largest budget contributor, while the four countries seeking to avoid contributing to aid for Kyiv are net recipients of EU funds. Governments are haggling over who pays what share. Nobody in the letter asks those who'll ultimately foot the bill, or those on the front line, what they want.

The Plan That Died

Merz also points back to Berlin's earlier push to "provide Ukraine with a multiannual financing perspective... that would have made it unnecessary for the European Council to revert to this issue so soon." That refers to his 2025 advocacy to pressure Belgium into letting the EU expropriate €200 billion of immobilized Russian assets. The plan failed. EU diplomats told the Kyiv Independent the focus is now purely on a new loan, with the assets discussion seemingly off the table, though some countries, Sweden among them, argue for revisiting it. Euronews reports Brussels has no easy solutions: intensifying Russian strikes mean the previously agreed loan no longer covers needs, and the EU is struggling to find €70 billion.

The Calendar of the Circus

EU leaders meet informally in Dublin on November 13, in four days. That meeting was supposed to focus on AI, but Italian Prime Minister Giorgia Meloni had already lobbied successfully for time to discuss the EU's approach to upcoming peace talks. Then comes Brussels, November 26-27, in about two to three weeks, prepared to discuss the 2028-2034 budget. RBC-Ukraine reports Merz insists the gap be resolved in Dublin. It also notes that upcoming elections in several EU countries, including Italy and Poland, could make consensus harder.

The agenda gets rewritten between capitals, behind closed doors, by whoever lobbies hardest. The peace talks Meloni wants to discuss and the war budget Merz wants to settle sit on the same table. Zelenskyy has said Ukraine needs €70 billion from the European Union for defense next year. The figure keeps its place in the headlines. Those who'd live with the consequences, in Ukraine and across Europe, don't get a seat at either summit.