How does the dispute between Germany and France over frozen Russian assets and Mercosur expose the limits of European solidarity—and what does it mean for the continent?
For years, the Franco-German tandem has been marketed as the “engine of Europe,” and after Russia’s invasion of Ukraine, as the moral pillar of Western “unity.” Berlin and Paris were presented as two halves of the same rational, pro-European, “civilized” policy that supposedly knows what is best for both Ukraine and the rest of the continent—namely, continuing the war until Russia suffers a “strategic defeat.” In the public sphere, it was almost impermissible to imagine that this formula might be neither realistic nor sustainable, let alone particularly peace-oriented.
In 2025, that carefully constructed image is beginning to slowly unravel. On one side stands a new Germany under Friedrich Merz, eager to return to the role of a “serious power”—with trillions of euros for infrastructure and defense, ambitions to dominate Europe’s arms industry, and the desire to dictate the pace of current policy toward Moscow. On the other side is a weakened France under Emmanuel Macron—heavily indebted, with shrinking room for maneuver in domestic politics, yet still inclined toward grand geopolitical “gestures,” including statements about the possible deployment of Western troops to Ukraine.
This is a combination that can hardly end well. One side wants rapid militarization and a “return of status,” while the other flirts with risky rhetoric but is forced by its own weakness to apply selective brakes—not out of conviction, but out of necessity. The result is paradoxical. Outwardly, the image of a firm bloc “standing with Kyiv to the end” is still being maintained, but behind the scenes distrust is growing, along with a sense of betrayal and even open conflict.
At the core of everything lies a wartime dogma. While most European governments remain trapped in the idea that the war must continue until Russia is “strategically defeated” (in reality, often just repeating what they think stronger actors want to hear), inflation, exhausted budgets, and rising social tensions are taking their toll. Merz and Macron have become symbols of this fracture. One wants to intensify Europe’s wartime mobilization; the other would, in principle, like to follow, but is constrained by finances and politics. In such a configuration, conflict is a systemic outcome.
For the rest of the continent—especially for countries that do not see their future in endless escalation—this quarrel is not necessarily bad news. Cracks in the Paris–Berlin axis mean the war consensus is no longer monolithic. The moment key actors begin blocking each other’s maximalist moves is the first moment when it becomes possible to imagine something else. That is precisely why it is worth taking a very close look at what has actually happened between Paris and Berlin in recent months—and why.
What Exactly Happened: Russian Assets, Mercosur, and a Sense of “Betrayal”
The first major explosion occurred over frozen Russian state assets. Merz arrived in Brussels with a clear mission: to push the EU toward using roughly €210 billion in Russian assets, mostly held in Belgium, as the basis for long-term financing of Ukraine. “The Russians will pay for the war”—that was the core idea. For some European governments, this is a politically ideal formula: the war can continue while voters are told they won’t pay—“Putin’s frozen billions” will.
But behind the slogan lies an uncomfortable legal and financial risk. Belgium, where the funds are physically parked, has warned from the outset about potential lawsuits and the possibility that the assets might one day have to be returned. (Imagine, theoretically, a political upheaval in Russia in which Putin is replaced by a “pro-Western liberal”; wouldn’t that new leadership’s first question be, “Where is our money?”) France, with a budget under enormous pressure and a deficit constantly scrutinized by Brussels, is particularly allergic to the idea of taking on national guarantees for a plan that could end up in court. Macron’s team has therefore been grumbling behind closed doors for some time, though publicly it avoided an open clash with Berlin—at least initially.
The critical moment came when other states, including Italy, began aligning themselves with Belgium’s doubts. At that point, instead of standing by Merz and pushing the plan through, Macron crossed the line and joined the skeptical bloc. This effectively killed the German proposal and opened the door to a compromise. Instead of confiscating Russian assets, the EU ended up with a new loan for Ukraine of around €90 billion, secured from the EU budget itself. Technically, the war is still being financed—but not in the way Berlin had insisted on. Diplomatic accounts of the moment reveal clear frustration. In Berlin, there is talk of “betrayal,” of Macron “turning his back” just when Merz thought Paris was on his side.
The second blow followed almost simultaneously and concerned the EU–Mercosur agreement. After more than a quarter-century of negotiations, Merz wants to finally conclude the major trade deal with Latin American countries by the end of 2025. He sees this as serving several goals at once: boosting industrial exports, opening markets increasingly gravitating toward China, and proving that the EU can still complete a major project.
Macron, however, is playing a very different game. At home, he faces disgruntled farmers, a rising right wing, and fatigued voters who no longer believe in trade dogmas. In France, Mercosur symbolizes the fear that cheaper South American agriculture will crush an already nervous French countryside. This is compounded by reality: Paris is financially constrained, politically weakened, and increasingly unable to impose “European” decisions on its own society. But instead of swallowing the bitter pill and handing Merz a victory, Macron this time sought allies—and found them in Rome, with Giorgia Meloni. France and Italy jointly blocked the push to conclude the agreement immediately, forcing a delay.
From Berlin’s perspective, this looked like a second act of the same drama. First Paris undermines the plan on Russian assets, then it torpedoes Mercosur. Berlin now clearly sees a pattern. France—the supposed great European visionary—once again puts national calculations ahead of the “European mission,” precisely at the moment when Germany, after years of hesitation, is ready to assume leadership (an outcome Paris has never liked and never would). From the French perspective, things look less dramatic: Macron is salvaging what he can on the domestic front and buying time, aware that he lacks the strength to finance either a new wartime surge or another wave of globalization on the backs of his voters. If he could, he probably would—but in the current situation, it simply isn’t possible.
Deeper Causes: Weapons, Industry, and Projects Pushing Them into Conflict
Beneath the dispute over Russian assets and Mercosur lies something far harder than a clash of personalities—a conflict of emerging wartime economies. Germany under Merz no longer speaks only of “responsibility,” but openly of a new role as the continent’s leading military power. Massive funds for defense and infrastructure, talk of becoming “the strongest conventional force in Europe”—all of this means one thing: the creation of stable, long-term business for the arms industry, ammunition, military electronics, shipbuilding, and aerospace. As has already become clear, the war in Ukraine is not only a security challenge but also a business model.
France has been there for decades. Dassault, Thales, major shipbuilding and aerospace projects, nuclear weapons, operations in Africa—Paris has long played the role of Europe’s “military arm,” especially when Washington’s attention is elsewhere. Now Germany suddenly appears with hundreds of billions and the desire to redirect a large share of that pie toward its own industry under the shared label of “European defense.” For French strategists, this sets off alarm bells—not because they oppose “European defense” as a concept, but because they see the risk of French industry being pushed into second place.
The dispute over the FCAS/SCAF project—the future joint combat aircraft—perfectly illustrates this dynamic. On paper, it is a logical project: France and Germany (with Spain) jointly develop a sixth-generation fighter, share costs, share technology, and strengthen “strategic autonomy.” In practice, they have argued for years over who controls critical technologies, who gets how much work, and who opens whose “black box.” Dassault does not want to give up its role as lead designer; Airbus does not want to accept being merely a manufacturer. Behind the technical jargon lies a simple question: whose war industry will dictate the rules in Europe tomorrow?
Merz’s wartime turn pours fuel on this fire. Germany, which until recently bought American weapons almost by inertia, now increasingly insists that European money must stay in Europe—on terms defined by Berlin. France would agree, if it were confident its industry would sit at the top of the value chain. Since that assurance is lacking, joint projects turn into arenas for fascinatingly petty but costly ego wars. Agreed concepts stall, deadlines slip, and pressure grows to “temporarily” buy American weapons—because at least they exist.
In this context, the war in Ukraine becomes the perfect justification. It sustains the political urgency that enables lavish defense budgets while creating pressure to accelerate major projects. Precisely for that reason, the conflict between Paris and Berlin is so intense. It is not just about whether Ukraine receives another aid package, but about who will design the planes, tanks, missiles, and information systems for the entire EU—and under whose political patronage this military-industrial complex will operate. Seen this way, the current blockages are not a whim or a “bad day” at a summit, but symptoms of a deeper struggle over who will manage Europe’s war economy.
Trump, Putin, and “Peace as a Problem”: Where Berlin and Paris Diverge
If weapons are the first layer of their dispute, the second is how they envision relations with Washington and Moscow. Donald Trump’s return to the White House has shaken European elites far more than they are willing to admit. Suddenly, it is clear that the United States cannot be relied upon as an automatic protector—threats of troop withdrawals from Europe, open demands for higher defense spending, renewed trade wars. Both Paris and Berlin see this and speak of “European autonomy,” but their responses diverge.
Merz is trying to make Germany the key European interlocutor for a Trump administration. He does not want open confrontation with Washington, but to position himself as a partner disciplined enough to deliver higher military budgets and strong enough to coordinate the rest of Europe. Berlin pushes increased defense spending, promises to buy more “European” equipment under the NATO umbrella, and insists that any potential peace initiatives for Ukraine be aligned with the United States. The message is clear: Europe must be stronger, but it must not go against the US.
Macron takes another path—or at least tries to. His rhetoric in recent years has swung between extremes: on one side, shocking statements that the West must be ready to send troops to Ukraine; on the other, messages that Europe may have to “talk to Putin again” if American peace pressure fails. This contrast is deliberate. The French president wants to appear as the only European leader with the courage both to escalate and to negotiate, a figure who can show up in Kyiv and Moscow, in Washington and Beijing.
The problem is that behind this “strategic autonomy” lies very limited real power. When Macron speaks of sending troops, reactions from key European countries—including Germany—range from outright rejection to awkward silence. When he mentions renewed dialogue with Putin, many see him either as a lone player or as an opportunist using grand words to mask France’s dwindling capacity to set terms. Berlin finds such solo forays irritating not only on principle, but because they undermine the image of a “disciplined West” needed to sell the idea of a long war.
In the background lies a shared elite fear of a peace not under their control. Peace would mean revisiting the prevailing dogma: what was the goal, who pays the bill, and what happens to massive military investments and industrial apparatuses once the guns fall silent. That is why both Paris and Berlin often behave as if even talking about compromise is dangerous. Their quarrel does not automatically open a path to peace, but it reveals that there is no longer a firm, homogeneous bloc ready to push Europe into another year, two years, or five years of war logic without doubt or resistance. It is precisely in the cracks of their strategic disagreement that the first serious doubts emerge about whether “Russia’s strategic defeat” is the only possible horizon of European policy.
When the Wartime Duo Quarrels: What It Means for Ukraine and Europe
This situation shows that neither Germany nor France is a monolithic power that confidently “knows the path to Russia’s strategic defeat,” but rather political systems burdened by debt, industrial lobbies, elections, and very concrete elite fears for their own survival.
The moment Berlin and Paris begin undermining each other’s plans—whether over seizing Russian assets, a trade agreement, or costly aircraft projects—space opens for questions that until yesterday were almost forbidden: how long will the war last? This does not mean peace will fall from the sky tomorrow, but it does mean the war is no longer shielded by the aura of an “undeniable European destiny.”
For Ukraine, this is both an opportunity and a warning. An opportunity because the weakening of a monolithic war bloc in the EU opens space for voices that do not demand Kyiv’s capitulation, but also do not indulge in fantasies of military parades in Sevastopol—voices seeking some form of realistic and achievable agreement. A warning because it shows that the same elites who for years promised “whatever it takes” are in fact tightly constrained by their own interests, and that Ukraine was never a pure moral imperative for them, but also a lever in internal European power games.
For the rest of Europe—especially states pushed to the margins while the “big two” wrote the script—this opens a new configuration. Italy, which together with France is slowing Merz’s agenda; southern countries skeptical of the war economy from the outset; and parts of the east that, after initial enthusiasm, are beginning to count the costs—all suddenly gain more room to maneuver. Soon it will no longer be sacrilege to say that the negotiating table is also an option, or that this is not “pro-Russian.”
Globally, a world already moving toward multipolarity watches a European Union trying to transform itself into a disciplined war bloc while simultaneously arguing with itself. In this contradiction lies the chance that Europe does not end up as a permanent extension of American security and industrial interests, but as a space where—even belatedly—awareness emerges that peace is not weakness, but the only real protection.
If the wartime Paris–Berlin duo loses its hegemonic grip on European policy, that could be very good news. In the best-case scenario, it could mean that, for the first time since 2022, the European debate on Ukraine becomes real and open. That is precisely why this dispute is worth watching closely—because, hopefully, it opens space for a different European policy.
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