Overview

• Merz outlines a financing mechanism that would mobilize nearly €140 billion of immobilized Russian central-bank assets as a zero-interest loan to Ukraine.
• Repayment would occur only once Russia compensates Ukraine for war damages, tying the loan to eventual reparations.
• Member states would provide guarantees initially, with a potential backstop via the EU’s next multiannual budget starting in 2028.
• Merz plans to raise the idea at an informal EU summit in Copenhagen next week, and the measure would require agreement across the bloc and resolution of legal hurdles.
• The proposal marks a shift in his position, and comes as the EU already channels interest from roughly €200 billion in frozen Russian assets to support Ukraine.