Germany Pushes to Unlock Frozen Russian Assets for $164 Billion Loan to Ukraine

German Chancellor Friedrich Merz has called for the European Union to unlock up to 140 billion euros ($164 billion) in frozen Russian assets to aid Ukraine’s ongoing war against the country.

Merz set out his proposal in an article printed in the Financial Times, and also outlined his plans in a series of posts on X.

The German leader suggested the EU give Ukraine an interest-free loan of almost 140 billion euros.

“That loan would only be repaid once Russia has compensated Ukraine for the damage it has caused during this war. Until then, the Russian assets will remain frozen, as decided by the European Council,” he wrote.

He went on to say that the assistance “will require budgetary guarantees from member states” initially but that those bilateral guarantees should be replaced by a collateralized EU guarantee once the bloc’s next Multiannual Financial Framework is in place in 2028.

“We need a new impetus to change Russia’s calculations,” Merz added in the commentary. “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.”

He went on to propose that at the European Council to be held at the end of this month, EU member state leaders should “give the mandate to prepare this instrument in a legally secure manner.”

This is the first time Merz has given his backing to such a plan to send the roughly 210 billion euros frozen in the European Union to Ukraine without confiscating it—a red line for many member states and the European Central Bank.

German Finance Minister and Vice Chancellor Lars Klingbeil echoed Merz’s call in a separate statement.

“We need maximum pressure on Putin to finally end his brutal war against Ukraine. The killing must come to an end. That is why it is right to make stronger use of the frozen Russian assets. Germany is ready to explore new paths that are legally possible and responsible,” Klingbeil said in a post on the Finance Ministry’s X account.

“We will continue to work intensively on this within the circle of G7 and EU finance ministers. We must further strengthen and secure for years Ukraine’s defense capabilities. And when it comes to reconstruction, Putin will have to pay for the destruction caused by his war.”

Until now, the EU has taken only interest generated from the Russian assets, which were frozen after Moscow invaded Ukraine in February 2022.

Germany, Kyiv’s second-biggest military backer, has previously expressed concerns over the legality of proposals to seize the frozen assets completely.

The Kremlin has so far not commented on the suggestions made by Berlin.

Merz’s comments come a day after Ukrainian President Volodymyr Zelenskyy said he would be ready to step down after the war with Russia is over, in an interview published on Sept. 25.

Zelenskyy said he would call for elections and would not seek reelection as president if a lasting cease-fire between the warring countries could be reached.

“If we finish the war with the Russians, yes, I am ready not to go [for elections] because it’s not my goal, elections,” Zelenskyy told Axios in a video interview.

“I wanted very much—in a very difficult period of time—to be with my country, help my country. My goal is to finish the war.”

Zelenskyy told Axios he will ask Ukraine’s Parliament to organize elections if a cessation of hostilities between Moscow and Kyiv is achieved.