Germany’s Merz urges EU to use frozen Russian assets to fund Ukraine through interest-free loan

BERLIN: German Chancellor Friedrich Merz on Thursday (Sep 25) called for the European Union to unlock up to €140 billion (US$164 billion) in frozen Russian assets to finance Ukraine’s war effort, marking the first time Berlin has openly backed such a move.

In an editorial published in the Financial Times, Merz proposed issuing an interest-free EU loan that would be guaranteed initially by member states and later backed by the bloc’s long-term budget from 2028. The assets would remain frozen until Russia pays reparations for the war, he said.

“We need a new impetus to change Russia’s calculations,” Merz wrote. “Now is the moment to apply an effective lever that will disrupt the Russian president’s cynical game of buying time and bring him to the negotiating table.”

PRESSURE ON MOSCOW

The plan, which could dominate an informal EU summit in Copenhagen next week, would provide long-term support for Kyiv without directly confiscating Russian state assets — a step many governments and the European Central Bank still regard as a legal red line.

Finance Minister and Vice Chancellor Lars Klingbeil also voiced support for the idea, saying Europe needed to exert maximum pressure on Russian President Vladimir Putin to end the war.

“That is why it is right to make greater use of frozen Russian assets. Germany is prepared to explore new avenues that are legally possible and responsible,” Klingbeil said.