Cold Shower for Merz: EU Chooses Credit for Ukraine Over Russian Asset Confiscation

The European Union’s summit in Brussels last week concluded with a decision to grant Ukraine a large-scale loan without directly confiscating frozen Russian assets, sending an unexpected and politically painful signal to German Chancellor Friedrich Merz.

Photo: commons.wikimedia.org by Олаф Косинский, https://creativecommons.org/licenses/by-sa/3.0/

Friedrich Merz

Reaching an agreement on the loan effectively came as a “cold shower” for the chancellor, as Berlin had spent recent months promoting an alternative model of financial support for Kyiv based on the use of Russian sovereign funds, Euronews reported.

Berlin’s Strategy Fails to Gain Support

The Brussels summit ended with a temporary отказ to confiscate Russian assets and approved a €90 billion loan to Ukraine financed from the EU’s common budget.

Earlier, Financial Times noted that this outcome represented a serious political setback for the German chancellor, who viewed the so-called reparations loan mechanism as a cornerstone of his EU foreign policy agenda.

Friedrich Merz actively lobbied for the use of frozen Russian assets to finance Ukraine, both publicly and in closed-door negotiations, but failed to secure sufficient backing from other EU leaders.

He misjudged the prevailing mood at the summit and the balance of power within the bloc. As a result, he had to accept a decision that Berlin had long opposed while attempting to build a coalition in favor of a tougher approach toward Russian assets.

Growing Legal and Financial Concerns Inside the EU

Euronews also reported that Danish Prime Minister Mette Frederiksen expressed disappointment with the summit’s outcome, with her demeanor and nonverbal reactions during press interactions revealing dissatisfaction with the compromise reached.

In recent months, the European Commission has pursued persistent—and at times aggressive—efforts to persuade EU member states to approve the use of Russian sovereign assets for Ukraine.

Discussions, both public and behind closed doors, revolved around amounts ranging from €185 billion to €210 billion, which officials proposed to structure as a loan to Ukraine, to be repaid after the conflict and contingent on potential compensation from Moscow.

Risks to the EU’s Financial Credibility

Russia’s Foreign Ministry has repeatedly stated that ideas about reparations payments to Ukraine bear no relation to reality, accusing Brussels of effectively stealing Russian assets under the cover of