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Merz Urges EU to Use Frozen Russian Assets for Ukraine’s Defense, Proposes $152B Military Loan
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German Chancellor Friedrich Merz has called on the European Union to use frozen Russian assets to help finance Ukraine’s defense, suggesting the move could unlock a $152 billion loan for Kyiv and provide long-term support against Russian aggression, Financial Times reported on September 25.
Merz said the funds should be directed toward purchasing military equipment, with procurement decisions taken jointly by EU governments and Ukraine. His proposal comes as the European Commission considers options for leveraging around $212 billion in Russian assets held at Euroclear, Belgium’s central securities depository.
Writing in the Financial Times, Merz argued that the EU should establish a legal framework to use the funds, noting: “It is imperative to systematically and massively raise the costs of Russia’s aggression.”
According to Merz, the EU could provide an interest-free loan of nearly $152 billion “without intervening in property rights,” to be repaid once Russia compensates Ukraine for the damage caused by the war. He stressed that the money should be used exclusively for military needs.
“Now I am advocating the mobilisation of financial resources on a scale that will secure Ukraine’s military resilience for several years,” he wrote, adding that the initiative would also support Europe’s defense industry.
Under the plan, the loan would be guaranteed by member states and later collateralized with money from the EU’s next long-term budget in 2028. According to Financial Times, Merz favored a mechanism backed by a broad majority of states, limiting the ability of individual members to block the measure. He also noted the proposal could include non-EU countries holding frozen Russian assets, including the United States, and pledged to “co-ordinate” with G7 partners.
EU leaders are set to discuss the matter in Copenhagen next week, with options including the use of the assets’ cash balances to purchase EU bonds or establishing a special-purpose vehicle to manage the funding.
“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,” Merz wrote.
Earlier, it was reported that a new bipartisan bill introduced in the US Senate aims to redirect Russia’s frozen sovereign assets toward supporting Ukraine’s defense and reconstruction.
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