At the upcoming European summit, German Chancellor Friedrich Merz plans to utilize frozen Russian assets to build Ukraine. This indicates a growing resilience among Western allies regarding the economic smackdown of Moscow, while simultaneously helping the economy of war-torn Kyiv. Merz plans to advocate for a comprehensive approach allowing the EU to access over €300 billion in Russian Central Bank assets frozen in Europe and other G7 nations as a result of the full-scale invasion of Ukraine in February 2022
Chancellor Merz’s plans – a strategic shift
Chancellor Merz’s plans are a bold change. Up to now, it had been Germany’s legal and ethical arguments that blocked them from taking Ukraine’s reconstruction needs and the Russian war on Ukraine assets into account.
Ahead of the summit and with no legal options to hide behind, Merz spoke of the unity of Europeans as a moral imperative.
The German head-of-state is anticipated to put a plan involving an unactioned confiscated sovereign assets plan, as well as assets protected, which are considered egregious violations of state immunity. Instead of full confiscation, the plan says the German state would spend frozen assets to fund aid and reconstruction efforts in Ukraine. Frozen assets build an interest of several billion Euros annually.
While the proposal does have growing support, it is still controversial. Legal and EU concerns about the erosion of border control on the International Monetary System and the ‘trust’ carried by sovereign assets control are still very much to be considered.
Some are pushing to fast-track the use of frozen assets
The European Commission and Merz are trying to fast-track the use of frozen assets. An EU task force looking to avert illegal use of immobilized Russian funds has assessed the use of directly confiscated profit generated.
The plan is gaining momentum across the EU – the EU member, Germany’s approval, might sway a few hesitant states.
Germany is the last on the board, which means the proposal might gain the critical mass needed for formal adoption. Jorg Merz’s proclamation seems more defensible.
What are people saying about this plan?
Merz spoke about the unity of Europeans as a moral imperative, stating:
“We must send a clear signal that aggression will not pay.”
Merz also spoke about the purpose of the proposal, stating:
“We do not want to do this in order to prolong the war, but to end it. Putin must realize that our support for Ukraine will not wane, but will grow, and that he cannot count on outlasting us.”
Meanwhile, proponents of the plan love to quote on the record of the UN General Assembly for 2022 that says Russia is responsible and also stated that Russia should compensate Ukraine to justify the extraordinary violations of international law that are taking their states’ assets.
The upcoming winter summit is expected to be a crucial event for Russia and Ukraine
The upcoming winter summit will serve as a defense stage for the wider EU cohesion on the Ukraine issue. As the winter sanctions closure arrives and energy concerns vex the populace, EU cohesion on financial and sanctions integrated provision will be a governance challenge.
The continuing military support to Ukraine, humanitarian aid, and Ukraine’s accession to the EU, help to stabilize the hostile public and position Merz’s plan as a central proclamation to be governed.
The plan to use frozen Russian assets will be a significant shift in the West’s approach toward Russia if carried out. It will also be a resource donor to Ukraine and reinforce the fact that international law cannot be violated without cost. As the EU looks to the future, the Merz proposal will be an important step that aims to balance legal constraints with pragmatic moral considerations.