Friedrich Merz Calls for Using Frozen Russian Assets to Support Ukraine: A New European Solidarity and Defense Strategy
German Chancellor Friedrich Merz has issued a call to the European Union to accelerate the utilization of frozen Russian assets in order to provide Ukraine with a substantial financial loan totaling €140 billion.
This move aims to reinforce Europe’s stance against Russian aggression and demonstrate unity among allies in facing new challenges.
In an interview with the Financial Times, Merz noted that his previous skepticism about the idea has shifted, as this mechanism would enable financing military equipment and strengthening Ukraine’s defense without violating property rights.
He emphasized that the loan should be interest-free and repayable only once Russia compensates Ukraine for damages inflicted during the war.
Merz also stressed that EU member governments need to jointly decide on procurement of military supplies for Kyiv and establish legal frameworks for asset utilization.
He highlighted that the scale of asset use should ensure Ukraine’s military resilience for several years, with funds directed exclusively towards military needs rather than general budget coverage.
According to him, such a comprehensive program would not only bolster Ukraine’s defense capabilities but also enhance Europe’s position globally and foster the development of the European defense industry, contributing to regional sovereignty and security.
Merz proposed that the initial loan be guaranteed by EU member states and backed by collateral from future long-term EU budget funds for 2028.
He argued that this mechanism could be approved by a majority of member states and serve as an effective lever against Russia’s cynical tactics, compelling it to enter negotiations.
The frozen assets mainly consist of European, American, and British government bonds stored in the Euroclear securities depository in Belgium.
Brussels is already working on unlocking part of these funds by next year, with plans to effectively lend these assets to Kyiv, promising to cover any Euroclear losses if Russia fails to make payments or compensates Ukraine after the war.
For more details, see the article – ‘€70 Billion Idea: How the EU’s New Strategy on Frozen Russian Assets Changes the Game.’