Merz Urges €140 Billion EU Loan for Ukraine Backed by Frozen Russian Assets
German Chancellor Friedrich Merz has urged the European Union to mobilize frozen Russian state assets to finance an unprecedented €140 billion interest-free loan for Ukraine, a move he argues would both secure Kyiv’s long-term defense and strengthen Europe’s own security architecture.
The Gaze reports this, referring to the Financial Times.
In an opinion piece for FT, Merz proposed that the loan be devoted exclusively to military procurement, with EU governments coordinating purchases jointly with Kyiv.
He stressed that the measure should not be used to cover Ukraine’s budget needs but rather to sustain its battlefield resilience and bolster Europe’s defense industry.
“I advocate the mobilization of financial resources on a scale that will ensure Ukraine’s military resilience for several years,” Merz wrote, adding that Europe must “systematically and massively increase the cost of aggression for Russia.”
The European Commission is currently examining options for deploying roughly €194 billion in immobilized Russian assets held at Euroclear in Belgium.
Merz insisted the EU must establish a legal mechanism to use these funds without infringing on property rights, noting that repayment would only occur once Russia pays reparations for war damages.
Under his proposal, the loan would initially be guaranteed by EU member states and later anchored in the bloc’s next long-term budget cycle starting in 2028. The structure, requiring only a qualified majority of member states, would prevent a single country from blocking the plan.
Merz framed the initiative as a critical test of Europe’s resolve. “Now is the time to use an effective lever that disrupts President Putin’s cynical game of buying time and brings him to the negotiating table,” he argued.
The proposal follows comments by European Commission President Ursula von der Leyen last week, who confirmed Brussels is developing new mechanisms to channel frozen Russian assets into Ukraine’s defense effort.
As The Gaze reported earlier, Ukraine could gain access to as much as $300 billion in funding under a new European-backed plan that would channel frozen Russian assets into a reparations-linked loan.