Germany backs EU plan to use frozen Russian assets for Ukraine

Germany has emerged as a key supporter of a controversial European Commission plan to use frozen Russian state assets to finance Ukraine’s war effort — a significant policy shift that could unlock billions of euros without directly burdening EU taxpayers.

Michael Clauss, the adviser for European affairs to German Chancellor Friedrich Merz, said Berlin is open to "new, legally sound" mechanisms to utilize the assets — up to €172 billion — currently immobilized in Europe, POLITICO reports.

"We are open to look at new, legally sound options on the table to make use of the Russian frozen assets," Clauss said in written remarks, signaling a major pivot from Germany's previous caution on the issue.

The European Commission’s proposal involves extracting the cash generated from Russian state assets held by Euroclear, a Brussels-based financial institution. These assets — invested in Western government bonds — have matured into liquid funds. Under the plan, the EU would send these funds to Ukraine and replace them with EU-backed zero-coupon bonds, effectively deferring the legal and financial ramifications.

By using bonds as placeholders, Brussels hopes to avoid the perception of expropriating Russian property. One EU diplomat described the idea as “legally creative.” The hope is to offer Ukraine vital financial lifelines while avoiding direct seizure of the underlying €13 billion in assets still held.

Berlin is now pressing other EU countries to rally behind the proposal ahead of an informal European Council meeting in Copenhagen.

“That’s also going to be a key topic of discussion at the Informal EUCO (European Council),” Clauss noted. “The Ukrainians need the money to continue to purchase weapons, and there are not so many options.”

The shift in Germany’s position contrasts with the more cautious stance of France. President Emmanuel Macron recently warned, “you cannot seize these assets from the (Russian) Central Bank” because it would violate international laws.

Nevertheless, Germany views the plan as an opportunity to provide military assistance through what it sees as a “reparations loan,” according to three officials familiar with internal discussions.

With US support for Ukraine waning under President Donald Trump, the pressure is on the EU to step up. The Commission sees the plan as one of the last viable options to help Ukraine without resorting to national budgets.

By Vafa Guliyeva