Merz argues that such a move would signal Europe’s resolve and could compel Russian dictator Vladimir Putin to negotiate a genuine peace deal.
“We need a new push to change Moscow’s calculus,” he said.
“Now is the moment to deploy an effective lever that will thwart cynical attempts by the Russian president to buy time and bring him to the negotiating table.”
Merz said Berlin remains cautious about outright confiscation of frozen Russian assets, given international law and the euro’s role as a global reserve currency. Still, he argued, the bloc must not let legal concerns stall its support for Ukraine.
Under the plan, the loan would remain on EU books and Moscow’s assets would stay frozen as decided by the European Council. EU member states would initially underwrite to loan, until the burden is transferred onto EU’s 2028–2034 budget. Kyiv and EU capitals would jointly decide, in quarterly reviews, which military equipment to purchase with the fund.
Merz urged EU leaders to endorse the proposal at a summit in Copenhagen on Oct. 1 and to mandate its legal preparation at the European Council meeting later in the same month. Ideally the decision would be unanimous; if not, he said, a qualified majority of member states firmly committed to Ukraine should implement it.
He also called on other countries that have frozen Russian assets to join the proposed program and pledged close coordination with G7 partners.
“For Germany, it is essential that these additional funds be used exclusively to finance Ukraine’s military needs, not general budget expenditures,” he said.
“This comprehensive program should also help strengthen and expand Europe’s defense industry, serving both our collective security and our sovereignty.”