On September 10, during her speech on the State of the European Union, the President of the EU commission Ursula von der Leyen introduced the idea of robbing Russian state assets which are currently frozen in Europe under EU sanctions:
This is Russia’s war. And it is Russia that should pay.
This is why we need to work urgently on a new solution to finance Ukraine’s war effort on the basis of the immobilised Russian assets. With the cash balances -associated to these Russian assets, we can provide Ukraine with a Reparations Loan. The assets themselves will not be touched. And the risk will have to be carried collectively. Ukraine will only pay back the loan once Russia pays for the reparations. The money will help Ukraine already today.
The idea was too illegal and stupid to get much traction. But when Chancellor Friedrich Merz of Germany started to back it others picked up on the theme. In a September 26 op-ed in the Financial Times Merz supported the idea (archived) but proposed that all money spent under the plan should go to the owners of European weapon factories:
For Germany, it will be important that these additional funds are solely used to finance Ukraine’s military equipment, not for general budgetary purposes. Payments should be disbursed in tranches. Member states and Ukraine would jointly determine which materiel is procured. In my view, such a comprehensive programme must also help to strengthen and expand the European defence industry.
Merz wanted Military Keynesianism, which “is an economic policy based on the position that government should raise military spending to boost economic growth”, to push for economic growth. Usually governments have to go further into debt to finance such endeavors. But Merz had already exceeded the budget limits and more debt is not something that German voters support.
To use the Russian assets for military Keynesianism was only a disguise. Russia was and is very likely to win the conflict in Ukraine and the winner of a war does not pay reparations. When the war is over the frozen Russia’s assets will have to be given back to their owner. Any ‘loan’ to a bankrupted Ukraine, based on Russian assets or not, would thus have to be paid by European taxpayers. That’s why I headlined:
Another Crazy Idea On How To Steal Russia’s Assets: Make EU Taxpayers Pay For It – MoA, Sep 26 2025
Most of the Russian assets are frozen in Belgium and it was the Belgium Prime Minister Bart De Wever who immediately rejected the idea:
Speaking in the margins of the UN General Assembly, Mr De Wever said that Chancellor Merz’s proposal “will never happen”. The Belgian Prime Minister argues that seizing central bank assets of a third country would set a dangerous precedent
“If countries see that central bank money can disappear when European politicians see fit, they might decide to withdraw their reserves from the eurozone.”
Despite the resistance to and problems of the idea, UvdL and Merz invested three month to push the it.
They threatened Brussels, launched a campaign of anti-Russian propaganda and came up with fake legal reasoning to justify their attempt of the biggest bank robbery in history
On Thursday night, December 18, their plan crashed:
European governments failed to reach a deal on sending Russian frozen state assets to Ukraine after a 16-hour summit in Brussels, in a major setback for German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen.
Countries were forced instead to agree on an emergency backup plan based on EU joint debt that was pushed for weeks by Belgian Prime Minister Bart De Wever and was deemed a long shot until hours before the deal was done. In a further blow to EU unity, three countries ― Hungary, Slovakia and the Czech Republic ― won’t take part.
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Though the accord allows everyone to claim victory, this wasn’t the solution that Germany and the Commission had been pushing for in the lead-up to this summit.
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For weeks, the EU executive and Berlin have been pressuring member countries to finalize a controversial plan to use up to €210 billion Russian frozen state assets to finance Ukraine. De Wever ensured once again that didn’t happen after already derailing the Russian assets scheme during a previous summit in October.Instead, leaders agreed to jointly borrow €90 billion to fund a loan to Ukraine over two years. This will be guaranteed by the common EU budget.
The original plan was to take €135 billion from the Russia assets of which €45 billion would be used by Ukraine to pay back an older loan it had received from the EU. €90 billion would thus go towards Ukraine’s budget.
The new plan is to give Ukraine €90 billion. How much of that will have to be used to pay back the old loan to the EU has not yet been mentioned. Could it be that the EU will have to pay for the total €135 billion? Why didn’t anyone write about it?
Ukraine will only have to pay back the new loan if Russia agrees to pay reparations to Ukraine. As Prime Minster Viktor Orban of Hungary notes:
For this money to ever be recovered, Russia would have to be defeated. That is not the logic of peace but the logic of war. A war loan inevitably makes its financiers interested in the continuation and escalation of the conflict, because defeat would also mean a financial loss. From this moment on, we are no longer talking merely about political or moral decisions, but about hard financial constraints that push Europe in one direction: into war.
The Brusselian war logic is therefore intensifying. It is not slowing down, not easing, but becoming institutionalised. The risk today is greater than ever before, because the continuation of the war is now coupled with a financial interest.
As Russia can not be defeated by the rest of Europe (not even with U.S. support) the €90 billion will have to be paid by EU tax payers. One wonders how national parliaments of already overextended states (see France) will handle this issue.
Those are not the only problem with the new loan. No details have been spelled out yet how it will be structured or financed. The official Conclusions of the EU meeting ominously notes :
The European Council will revert to this issue at its next meeting.
It is therefor unlikely that this was the last time that conflicts within the EU about ‘loans’ to Ukraine will break out.