FT: Ukraine funding deal masks deepening Franco-German divide

According to an analysis by the Financial Times, the latest EU summit exposed a widening imbalance at the heart of the Franco-German relationship, as Germany under Chancellor Friedrich Merz pushes assertively for action while France, constrained by debt and domestic politics, increasingly acts as a brake.

Merz entered the Brussels talks determined to convince EU leaders to deploy €210bn in frozen Russian sovereign assets to support Ukraine. Yet, as the Financial Times recounts, the German leader ultimately lacked a decisive ally in French President Emmanuel Macron. Although Macron did not openly oppose the plan in public, his advisers privately raised concerns over its legal basis and warned that France’s strained public finances made it difficult to offer guarantees should the assets ever need to be returned to Moscow. As Italy and others aligned with Belgium — home to most of the frozen assets — Macron eventually followed suit, dooming the proposal.

“Macron betrayed Merz, and he knows that there will be a price to pay for that,” said a senior EU diplomat cited by the Financial Times. “But he’s so weak that he had no other choice but to fold in behind Giorgia Meloni.”

The episode illustrates a reversal of traditional roles between Europe’s two largest powers. Germany, newly emboldened after Merz unlocked up to €1tn in defence and infrastructure spending, has become initiative-driven. France, by contrast, is hampered by political instability and debt in the latter half of Macron’s presidency. This imbalance has undermined hopes for a revival of the Franco-German engine that once propelled major EU decisions. As Georgina Wright put it, “In Brussels there’s a real sense that Berlin is the big player and that France’s influence is lacking.”

Tensions resurfaced again over the long-delayed EU-Mercosur trade agreement. Merz has pressed to finalise the deal by year-end, even threatening a vote that could isolate France. Once more, Macron found support from Italy’s Giorgia Meloni, delaying the decision and denying Merz another win. “But France is under far greater pressure — and this is causing fundamental differences between the two powers to resurface,” said Daniela Schwarzer.

Despite these clashes, the summit delivered agreement on a €90bn EU loan for Ukraine. French officials insisted Macron played a key role, while German officials stressed that the funding would come from unused EU budget resources, avoiding any hit to national finances. Merz welcomed the compromise, arguing it even surpassed his original plan. “We are making an advance payment, but it is secured by Russian assets,” he said.

Still, domestic criticism followed. Alice Weidel of the Alternative for Germany warned that the “German taxpayer will have to foot the bill again.” As Guntram Wolff noted, “It’s not great to come home without Mercosur or the plan on Russian assets. The question for Macron is whether it is smart to impose political losses on Merz on two big issues.”

By Tamilla Hasanova