German Prime Minister Friedrich Merz has called on the European Union to use $160 billion in frozen Russian assets for Ukraine’s profits, particularly the continued supply of arms, in Berlin’s major policy U-turn.
In manipulation in the age of finance, Mertz said there was a need for movement to allow Ukraine to demonstrate “the greater staying power” in the war, hoping to force the Kremlin to the negotiation table.
In the past, Berlin has been reluctant to use its funds, citing legal and financial concerns. On Thursday, Meltz adopted a more straightforward tone. “This should not hinder us,” he said. It urged the EU to think “we will avoid these issues.”
He added, “I have advocated for several years to mobilize financial resources on a scale that will ensure Ukraine’s military resilience.”
Currently, approximately $300 billion in Russia’s central bank assets are frozen internationally, with mostly $229 billion, mostly held in the European Union, along with the Belgian clearing house EuroClear.
The German Prime Minister is currently looking to spend $160 billion on Kyiv’s loans. This amount will “make Ukraine an interest-free loan that will be repaid after Russia compensates for the damage.
The Kremlin has long criticised the potential expropriation of Russian assets, and last week said such moves were “unanswered.”
Under Mertz’s proposal, Ukraine will only be allowed to use the funds to raise weapons, not for budgetary purposes.
Payment to Kyiv will be made in installments, and the EU state will determine “which materials are sourced” along with Ukraine.
Mertz added that he felt the mechanism would help “strengthen and expand” Europe’s own defence industry.
Germany ranks second only to the US on the list of countries that have contributed the most military and financial aid to Ukraine since the start of the war.
Merz, who won the election in February, is a strong supporter of Kiev and made the war in Ukraine a centre for his prime minister.
He is a key voice in the so-called “coalition of will,” and appears to have a good relationship with President Donald Trump.
The Prime Minister added that he urges European leaders to agree to the proposal at an informal EU meeting in Copenhagen next week, urging European leaders to agree to the proposal, aiming to prepare their mandate at the next EU summit at the end of October.
He added that he hopes the proposal will either get “unanimous” approval or fail to “be adopted by the majority.” These comments are likely a message to Hungarian Prime Minister Victor Orban and Slovak Robert Fiko, both of whom are members of the EU with close ties to Russian President Vladimir Putin.
