Von der Leyen also wants to use Russian money in Germany

Ukraine war

Von der Leyen also wants to use Russian money in Germany

The EU Commission wants to use fixed Russian assets to cover Ukraine’s financial needs. So far, the focus has been primarily on Belgium. That could now change.

Germany and several other states, like Belgium, should provide Russian funds to support Ukraine. According to EU officials, this is what the proposal now presented by Commission President Ursula von der Leyen for a so-called reparations loan worth up to 210 billion euros provides.

In addition to Germany, France, Sweden and Cyprus are also possible donors of Russian state assets for the project, with most of the money in France. The Russian central bank assets managed by the Belgian financial institution Euroclear are estimated at around 185 billion euros.

The Belgian government has repeatedly called for the participation of other EU states in recent months in order to reduce the risk of Belgium becoming the sole target of possible retaliation measures. Among other things, there is a risk that Moscow will expropriate European private individuals and companies in Russia.

The CEO of the German-Russian Chamber of Commerce Abroad, Matthias Schepp, recently warned that German assets worth over 100 billion euros were at risk. “Germany has invested in Russia like no other country. It therefore has the most to lose from the planned use of Russian central bank funds for arms purchases for Ukraine,” he told the German Press Agency in October.

The federal government has so far kept secret how much Russian central bank money is in Germany. All that was recently communicated was that assets totaling around 3.5 billion euros were frozen or immobilized in connection with the Russian war of aggression against Ukraine. This includes frozen funds and economic resources of listed persons or entities as well as “foreign assets of the Russian Central Bank that are subject to a transaction ban.”

Diplomats recently said that the central bank’s assets are probably in the smaller three-digit million sum. The federal government has not yet publicly taken a clear position on the question of whether it would be willing to contribute assets located in Germany. A spokeswoman for the Ministry of Finance told the German Press Agency in the evening: “The federal government is evaluating the proposal.” Please understand that this evaluation is still ongoing.

Governments of the member states must now discuss the EU Commission’s plan presented on Wednesday. President von der Leyen hopes that EU leaders will approve it at their December summit in two weeks. In the next two years, around 90 billion euros are expected to flow into Ukraine.

As an alternative to the concept for the use of Russian funds, von der Leyen also presented a concrete proposal for Ukraine to take on new EU debt. However, numerous countries such as Germany reject this and are hoping to break Belgium’s ongoing resistance to the use of Russian funds. The EU country plays a central role in the project, as a large part of the Russian funds there is currently managed by the company Euroclear.

The basic concept for the use of Russian funds has been known for several months and is also supported by Chancellor Friedrich Merz (CDU). It stipulates that Russia will only get its money back if it makes reparations payments after an end to its war of aggression against Ukraine. In the event that the frozen Russian money had to be unexpectedly released again, for example as a result of international judgments or deals, the EU states would only have to provide guarantees.