Despite Warnings, Germany’s Merz Says Billions In Russian Assets Can Be Tapped To Force Putin To Accept Peace

Via Remix News,

German Chancellor Friedrich Merz is now positive that the European Union has the proper legal basis to “unblock” up to €140 billion in Russian assets and use them to finance Ukraine’s military operations.

Beyond the legal questions surrounding the confiscation of Russian assets, not to mention the precarious precedent it would set, Paris, Brussels, and Berlin have so far argued that profits from frozen assets are already being allocated to aid Ukraine. Of key concern is also the risk of discouraging foreign investment in the EU, in particular, scaring away the Chinese.

However, Merz is now suggesting that Russian assets could continue to be frozen — and used as a loan to Ukraine — until Moscow pays Ukraine reparations for war damages. According to Merz, this would address the lack of a legal basis for such action, avoid infringing on Russian property rights, all by using the money to provide Ukraine with an interest-free loan.

The loan to Ukraine would be guaranteed by EU member states and then backed by the EU’s long-term budget from 2028.

“We need a new impetus to change Russia’s calculations,” Merz wrote in an article for the FT, cited by Do Rzezcy.

“The time has come to apply effective leverage that will break the Russian president’s cynical game of gaining time and force him to negotiate.”

The politician noted that the loan would have to be repaid once Russia committed to paying reparations for damages inflicted on Ukraine during the war. Payments would be transferred to Kyiv in tranches, and decisions regarding arms purchases would have to be made jointly by Ukraine and EU member states.

Merz hopes to pursue this option at the European Council meeting on October 23-24.

Some $300 billion worth of Russian assets is currently frozen across the EU, with a whopping €210 billion held in cash and bonds by the Belgian clearing house Euroclear.

Belgian Prime Minister Bart de Wever has recently pushed back against tapping these funds, saying, it’s not as simple as politicians saying, “When money owned by another country’s central bank is used by another country, it will have consequences.”

Deputy PM Radoslaw Sikorski is one of the parties also putting pressure on Belgium to release these funds and rallying member states to help insure it against potential Russian suits, telling journalists, “Poland is ready to participate in such insurance for Belgium, but not everyone is ready for it yet.”

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