BRUSSELS — Germany and the Netherlands are at odds with France in seeking to ensure Kyiv will be able buy U.S. weapons using the EU’s €90 billion loan to Ukraine.

EU countries agreed the crucial lifeline to Kyiv at a European Council summit in December, but the capitals will still have to negotiate the formal conditions of that financing after a European Commission proposal on Wednesday.

This sets up tense negotiations with Paris, which is leading a rearguard push to prevent money flowing to Washington amid a growing rift in the transatlantic alliance.

French President Emmanuel Macron is keen to give preferential treatment to EU military companies to strengthen the bloc’s defense industry — even if that means Kyiv can’t immediately buy what it needs to keep Russian forces at bay.

A majority of countries, led by governments in Berlin and The Hague, respond that Kyiv must have more leeway in how it spends the EU’s financial package to help fund its defense, according to position papers seen by POLITICO.

These frictions are coming to a head after years of debate over whether to include Washington in EU defense purchasing programs. Divisions have only worsened since U.S. President Donald Trump’s administration threatened a military takeover of Greenland.

Critics retort France’s push to introduce a strict “Buy European” clause would tie Kyiv’s hands and limit its ability to defend itself against Russia.

“Ukraine also urgently requires equipment produced by third countries, notably U.S.-produced air defense systems and interceptors, F-16 ammunition and spare parts and deep-strike capacities,” the Dutch government wrote in a letter to other EU countries seen by POLITICO.

While most countries including Germany and the Netherlands support a general “Buy European” clause, only Greece and Cyprus — which currently maintains a neutral stance as it is chairing talks under its rotating presidency of the Council of the EU — are backing the French push to limit the scheme to EU firms, according to multiple diplomats with knowledge of the talks.

Cash for Kyiv

EU leaders agreed last month to issue €90 billion in joint debt to support Ukraine, after Belgium and others derailed a separate plan to mobilize Russian frozen state assets.

Over two-thirds of the Commission’s funding is expected to go toward military expenditure rather than ordinary budget support, according to two EU diplomats briefed on the discussions.

With only a few days until the Commission formally unveils its plan, EU capitals are trying to influence its most sensitive elements.

Germany broke with France by proposing to open up purchases to defense firms from non-EU countries.

“Germany does not support proposals to limit third country procurement to certain products and is concerned that this would put excessive restrictions on Ukraine to defend itself,” Berlin’s government wrote in a letter sent to EU capitals on Monday and seen by POLITICO.

The Netherlands suggested earmarking at least €15 billion for Ukraine to buy foreign weapons that are not immediately available in Europe. 

“The EU’s defence industry is currently either unable to produce equivalent systems or to do so within the required timeframe,” the Dutch government wrote in its letter.

The French counterargument is that Brussels should seek to extract maximum value from its funding to Ukraine.

Critics say that boosting Ukraine’s defense against Russia should take precedence over any other goal.  

 “It’s very frustrating. We lose the focus on our aim, and our aim is not to do business,” said a third EU diplomat.

Another diplomat said that a potential French veto can be easily overcome as the proposal can be agreed by a simple majority of member countries.

Germany first

In a further point of controversy, the German government, while rejecting the EU preference sought by France, still suggested giving preferential treatment to firms from countries that provided the most financial support to Ukraine. This would play to the advantage of Berlin, which is among the country’s biggest donors.

“Germany requests for the logic of rewarding strong bilateral support (as originally proposed for third countries by the Commission) to be applied to member states, too,” Berlin wrote in the letter.

Diplomats see this as a workaround to boost German firms and incentivize other countries to stump up more cash for the war-torn country.

Giovanna Faggionato contributed to this report.