Costa Responds to German Budget Ultimatum on Ukraine Financing

European Council President António Costa has responded to German Chancellor Friedrich Merz over proposals linking approval of the next European Union budget to mandatory member state funding for Ukraine. Merz established a guaranteed financial commitment for Kyiv as a necessary condition for Germany to approve the bloc's next long-term budget, according to official correspondence.

In his letter to Costa, the German Chancellor stated that support for Ukraine is a matter of shared European security, adding that burden-sharing for financial assistance must be distributed across all member states. Costa informed Merz that time would be set aside for discussion during an informal summit in Dublin, ahead of formal negotiations planned for a special summit in Brussels.

The European Union has undertaken to cover approximately two-thirds of Ukraine's projected €70 billion financial gap, amounting to roughly €45 billion. To raise the required funds, European officials are considering a new round of joint debt as a leading option, with specific proposals expected from the European Commission later this month.

The linkage has encountered strong pushback from Slovakia, the Czech Republic, Hungary, and Bulgaria, all of which oppose forced participation in future aid packages. Slovak Prime Minister Robert Fico explicitly criticized the German condition, calling the initiative blackmail.

The four dissenting member states are demanding an opt-out mechanism from any prospective EU loan scheme designed for Ukraine. Formal deliberations between member state leaders will move forward once the European Commission presents its formal financial proposals.

Written by Christiane Hofreiter christiane.hofreiter@alpineweekly.com