Overview
- Chancellor Friedrich Merz reaffirmed in a Bundestag statement that frozen Russian reserves in Europe should back roughly €140 billion in loans to sustain Ukraine’s resilience.
- The European Commission has prepared a framework, but Belgium, where much of Russia’s central bank reserves are held, and several other capitals have raised legal and political objections.
- Russia’s ambassador in Germany condemned the idea as theft and warned of consequences, arguing the move would erode trust in the EU financial system and the euro.
- Key hurdles include state-immunity protections for central bank assets and the EU requirement to unanimously renew asset freezes every six months.
- With an EU summit in Brussels approaching, no decision has been finalized, and commentators describe the initiative as a risky taboo break with potential market and geopolitical fallout.