German chancellor suggests new EU sanctions could affect frozen Russian assets

German Chancellor Friedrich Merz does not rule out that further sanctions against Russia could also affect Russian assets frozen in the European Union.

"We're currently clarifying that. If there's a way to mobilise the money on a sound legal basis, we'll do it," he said in an interview with the German Die Zeit publication, Caliber.Az reports.

However, he also pointed out the risks such a step would pose for the European financial market.  

Since the beginning of Russia’s full-scale invasion of Ukraine in February 2022, the European Union, along with the United States and other Western allies, has imposed extensive sanctions on Moscow. These measures include restrictions on Russian banks, energy exports, key technologies, and the freezing of sovereign and private assets held abroad. According to EU data, around €200 billion worth of Russian central bank assets are currently immobilised within the European Union, primarily held by financial institutions such as Euroclear in Belgium.

In recent months, discussions have intensified among EU member states and G7 partners on how to use these frozen assets to support Ukraine’s reconstruction and war efforts. Proposals include seizing the assets outright or using the interest generated from them. However, such actions raise serious legal and financial concerns, especially regarding property rights under international law and the potential precedent it could set for other sovereign assets.

By Khagan Isayev