German chancellor to demand EU unlock Russian assets for Ukraine loan

German Chancellor Friedrich Merz has announced that at the upcoming European Council summit, he will urge the EU to use frozen Russian assets to provide Ukraine with a “reparation loan.”

Merz stated he would call on the EU, during the European Council meeting scheduled for October 23 in Brussels, to allocate frozen Russian assets for a “reparation loan” to Ukraine worth €140 billion, Caliber.Az reports via Reuters.

“We want to do this not to prolong the war, but to end it,” he emphasised.

The German Chancellor stressed that Putin “must realise” the EU’s support for Ukraine “will not wane, but will grow.”

Since the 2022 Russian invasion of Ukraine, Western states have frozen a large amount of Russian sovereign assets, including reserves held in Euroclear (a Belgian central securities depository).

These frozen assets are estimated at €185-€210 billion, much of which has matured into cash.

Merz isn’t the first to propose using these funds more actively.

In earlier drafts, the European Commission and several EU capitals advocated a “reparations loan” for Ukraine, financed by frozen Russian funds, with repayment dependent on Russia’s eventual compensation or end to its aggression.

By Khagan Isayev