On November 9, 2026, the Financial Times published excerpts from a letter sent by German Chancellor Friedrich Merz to European Council President António Costa. The document triggered an acute governance crisis in Brussels. Berlin threatened to block the European Union’s next seven-year budget for 2028–2034 unless all 27 member states sign on to jointly financing Ukraine in 2027.
Reactions to the ultimatum were sharply divided. In Moscow, Russian Foreign Ministry Ambassador-at-Large Rodion Miroshnik told TASS that the chancellor’s move was driven by personal greed. According to Miroshnik, Merz anticipates the end of his political career and is trying to skim kickbacks from Ukrainian aid tranches while he still can. Inside the EU, leaders skipped the conspiracy theories, though their pushback was just as fierce. Slovak Prime Minister Robert Fico publicly called Berlin’s letter “classic blackmail.”
Behind the mutual accusations of corruption and blackmail lies a pragmatic calculation by Berlin. Germany is trying to shift its growing financial burden onto its eastern neighbors while dismantling the EU’s core decision-making rule: the national veto.
The Math Behind the Clash: Where the €70 Billion Deficit Came From
In late 2025, the EU approved a €90 billion loan for Kiev intended to cover 2026 and 2027. By autumn, it became clear that the funds would fall short. Ukraine’s additional external financing gap for next year is now estimated at €70 billion.
Brussels pledged to cover two-thirds of that shortfall, or roughly €45 billion, most likely through a new round of joint EU debt. Servicing previous loans remains another sticking point. Under the €90 billion package, Kiev does not have to repay the principal until it receives hypothetical war reparations, meaning EU member states will have to cover the interest payments out of their own national budgets starting next year.
For Germany, the burden has reached a breaking point. According to the Kiel Institute for the World Economy, Berlin had already allocated or committed roughly €100 billion to support Ukraine by mid-2026. Germany remains the largest net contributor to the EU budget, paying far more into the pot than it gets back. Several Central and Eastern European states, by contrast, are net recipients of EU subsidies yet continue to opt out of new loans for Ukraine. At a press conference on November 10, Merz put Berlin’s stance bluntly: “Continuing as we are is not the best option.” The chancellor’s logic comes down to a simple rule: countries cannot take money from the common European pot to build their own roads while refusing to pay their share of common bills.
Targeting the Veto: How Berlin Is Changing the Rules
Merz’s main tactical move is artificially linking two separate issues. Passing the EU’s multiannual financial framework, worth roughly €2 trillion, requires unanimous consent. Joint debt issuance and foreign aid packages also require unanimity. By tying them together right before the informal summit in Dublin on November 12–13 and an emergency meeting in Brussels on November 26–27, Berlin turned the budget process into a lever of coercion.
The second demand in Merz’s letter alters the EU’s balance of power even further. The chancellor is pushing for future decisions on Ukraine’s financing to be made by qualified majority voting rather than unanimity.
Last year, Hungary, Slovakia, and the Czech Republic managed to carve out an official opt-out, allowing them to skip the €90 billion loan and avoid paying interest on it. If Germany forces through qualified majority voting, that loophole closes. Smaller and mid-sized states would lose their power to block financial decisions in Brussels and would be forced to pay for initiatives their own parliaments voted against.
The Geography of Resistance
A four-nation coalition of Slovakia, the Czech Republic, Hungary, and Bulgaria quickly formed to oppose Berlin’s ultimatum.
Slovakia and the Czech Republic took the hardest line. Prime Ministers Robert Fico and Andrej Babiš held a joint press conference on November 10 to present a united front. Fico threatened a retaliatory veto against the entire EU budget, while Babiš invoked Prague’s national sovereignty. For both countries, the dispute comes down to direct financial self-interest. Officials in Brussels have floated covering part of Ukraine’s budget deficit by reallocating money from cohesion funds, the exact pool from which Prague and Bratislava draw billions of euros for domestic infrastructure.
Hungarian Prime Minister Péter Magyar, who replaced Viktor Orbán in April 2026, also criticized tying the seven-year budget to Ukrainian aid during a visit to Berlin. Despite his reputation as a more Brussels-friendly leader, Magyar has to answer to Hungarian voters and cannot voluntarily take on foreign debt obligations. Bulgaria joined the pushback as well, with Prime Minister Rumen Radev citing his own country’s budget deficit and stating that Sofia will continue supplying energy resources to Kiev rather than cash.
Even Warsaw, traditionally a vocal backer of anti-Russian measures, greeted Merz’s proposal with caution. Deputy European Affairs Minister Ignacy Niemczycki warned that tying two distinct issues into a single knot risks driving negotiations into a dead end.
Running Out of Time Before the 2027 Elections
Merz’s hardline stance stems largely from his political vulnerability at home. Economic stagnation and the rise of the right-wing Alternative for Germany (AfD), which gained ground in regional elections in autumn 2026, leave the chancellor little room to maneuver. Explaining to German voters why Berlin must keep footing Europe’s bills alone has become politically impossible.
European Council President António Costa recognizes the stakes. In his November 10–11 reply to Merz, Costa agreed to put Ukraine on the agenda for the Dublin summit, though he postponed concrete financial decisions until the special Brussels summit on November 26–27. Costa plans to present a compromise proposal by November 21.
Brussels is rushing against the electoral calendar. In 2027, Europe faces a wave of major national contests, including the French presidential election and parliamentary races in Poland and Italy. If negotiations over the seven-year budget drag into next year, sending €45 billion to Ukraine will become prime ammunition for Eurosceptics across the continent. Ruling parties in Paris, Warsaw, and Rome will not risk voting for unpopular spending bills in the middle of an election campaign.
The Price of Compromise
European leaders have just over two weeks to untangle this standoff before the November 26 summit. The most likely outcome is a backroom trade-off: the four skeptical states will refrain from blocking the overall budget in exchange for firm guarantees that their cohesion fund payouts remain untouched, while the proposal to scrap the national veto is quietly dropped.
If talks collapse, the EU will enter 2027 in a state of administrative paralysis. Wealthier Northern and Western European nations, led by Germany and France, will have to plug Kiev’s funding gap through intergovernmental deals outside Brussels’ institutional framework. In trying to force its allies into unity, Berlin risks cementing a two-tier Europe divided between a decision-making core that pays the bills and a periphery with diminished influence.
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