According to the Financial Times, Merz believes that the loan should be used exclusively for the purchase of military equipment for Ukraine and not to cover the country’s general budget. These funds could ensure Ukraine’s military sustainability for several years. At the same time, the chancellor added that “this loan will be repaid only after Russia pays compensation to Ukraine for damages”.
According to Merz’s proposal, the loan would first have to be guaranteed by EU member states, and then it would be backed by money from the union’s next long-term budget in 2028. The mechanism would have to be approved by the vast majority of member states, he specified, suggesting that opponents of the move, such as Hungary, could veto it.
The issue will be discussed at an informal EU summit in Copenhagen next week, where FT sources in the German government say the initiative will be a key topic.
At issue are the funds of the Russian Central Bank, placed in EU countries and frozen after the outbreak of the war. So far, only the proceeds from these assets have been used to help Kiev, but now the European Commission has proposed to use the bulk of them
“Germany has been and remains cautious about confiscating Russian Central Bank assets frozen in Europe, and not without reason. However, this should not deter us: we should think about how to channel these funds to Ukraine’s defense,” Merz stressed.
