EU faces budget tensions as Trump urges bloc to pay for Ukraine arms

U.S. President Donald Trump’s proposal that the European Union finance American-supplied arms to Ukraine is heightening pressure on EU officials already struggling to balance defense ambitions with tight public finances.

The proposal comes as EU member states begin arduous talks over the bloc’s next seven-year, €1.2 trillion ($1.4 trillion) budget, Caliber.Az reports via foreign media.

While traditional priorities like agriculture and regional development still dominate spending, the war in Ukraine and waning U.S. support are driving an urgent push to redirect funds toward defense.

“There are so many priorities but so little money,” Czech Foreign Minister Jan Lipavsky said on July 15, warning that defense would have to compete with existing commitments. He predicted negotiations would be “very difficult.”

The European Commission is due to unveil its draft budget for the 2028–2034 period on July 16, with competitiveness and security topping the agenda. One option under discussion is expanding the bloc’s joint borrowing capacity to finance common defense procurement, though divisions remain.

Some member states, including Spain, France, and Greece, favor shared debt issuance or grants to support defense on Europe’s eastern flank. But Germany, the Netherlands, and others remain firmly opposed, citing fiscal risks and past borrowing under COVID recovery programs that have yet to be repaid.

Trump’s latest pledge includes a high-end weapons package for Ukraine — but he insists NATO’s European members foot the bill. The idea received a cool response in Brussels. “If you promise weapons but ask someone else to pay for them, it’s not really your contribution,” said EU foreign-policy chief Kaja Kallas.

EU treaties currently bar using common funds to buy U.S. arms for Ukraine, but officials have encouraged countries to tap into a €150 billion bloc-wide loan program for joint procurement. This could free up national funds for other purchases, including from U.S. suppliers.

Still, budget constraints are a major obstacle. Some EU leaders, like Spanish Prime Minister Pedro Sanchez, have questioned how NATO’s goal of spending 5% of GDP on defense could be reached without worsening public debt burdens.

EU Defense Commissioner Andrius Kubilius noted that bloc-level defense spending remains minimal — estimated at around 1/40th of member states’ individual military outlays. He emphasized that capitals could also use EU loans to purchase directly from Ukraine’s defense industry, offering mutual economic benefits.

European Commission President Ursula von der Leyen has echoed that call. “For our member states, it's high-quality, fast, and cheap,” she said. “For Ukraine, it's crucial revenue and a chance to build its defense base.”

Despite broad agreement that Europe must rearm, especially with U.S. policy uncertain, political divisions over funding methods continue to stall consensus.

By Aghakazim Guliyev