France is blocking the use of a €90bn EU loan granted in December to buy desperately needed American weapons as it wants the portion earmarked for weapons to be spent only in the European defence industry.

Several EU countries disagree on the terms of use for Ukraine's €90bn loan. Tensions have escalated among Germany, France, and other EU nations over the conditions attached to this loan, particularly regarding weapons purchases.

France, which has a large arms industry and would be one of main beneficiaries, is advocating a strict "Buy European" principle to direct these funds toward the European defence industry.

Emmanuel Macron, the French president, has long argued that the bloc’s support for Ukraine should be used to bolster the Continent’s arms manufacturers and promote defence independence from the United States. Only Greece and Cyprus currently back this position.

A potential French veto would not be decisive, as a majority vote would still approve the distribution of any financial package to buy weapons.

Conversely, most EU countries, including Germany and the Netherlands, argue that Ukraine should have broader options for using the funds. Russia’s advances on the battlefield are accelerating as Ukraine runs out of ammo and is increasingly desperate for more weapons, including things like more rockets for its Patriot missile air defence systems that only the US can supply.

Last week Ukrainian President Volodymyr Zelenskiy called on European allies to open their warehouses and supply Ukraine from their stockpiles as Russia pounds Ukraine with a non-stop barrage of drones and ballistic missiles.

The US has halted arms supplies to Ukraine unless Europe agrees to pay them. The Dutch government has emphasized the urgent need for Ukraine to acquire US air defence systems, interceptors, ammunition, and spare parts for F-16s, as well as long-range strike capabilities.

There is a proposal to allocate at least €15bn specifically for weapon purchases outside the EU under the Prioritised Ukraine Requirements List (PURL) programme.

Germany opposes imposing restrictions on purchases from third countries, stating that such limitations could significantly hamper Ukraine's self-defence capabilities. Furthermore, Berlin has suggested prioritizing defence companies from countries that have made substantial financial contributions to supporting Ukraine.