"Not acceptable": Merz rejects financial part of US plan - Germany Rejects US Plan to Use Frozen Russian Assets for Ukraine’s Recovery
German Chancellor Friedrich Merz has dismissed key parts of a US proposal to end the Russia-Ukraine war as 'unacceptable'. The plan involves using frozen Russian assets to fund reconstruction, but Merz insists Europe will not meet Washington’s financial demands.
The dispute centers on how to allocate roughly €252 billion in Russian state assets currently immobilized by Western sanctions.
The US proposal suggests taking $100 billion (€87 billion) from frozen Russian assets to finance Ukraine’s recovery. Under the plan, the US would keep half the profits generated, while the remaining funds would go into a joint US-Russia investment mechanism. This mechanism aims to fund projects that 'strengthen relations and expand shared interests' between the two countries.
Europe currently holds about €210 billion of the frozen Russian assets, with non-EU nations immobilizing another €42 billion. The US wants Europe to add a further $100 billion to the reconstruction fund, bringing the total to $200 billion. However, Merz has firmly rejected this demand, arguing that the US cannot unilaterally access Russian assets frozen within the EU.
Separately, the EU is considering its own plan to use the frozen Russian funds as collateral for a loan. This would allow Ukraine to purchase more weapons. But Merz’s stance makes clear that Europe will not simply follow the US approach without resistance.
The disagreement highlights tensions over how to handle Russian assets seized during the war. With Europe unwilling to contribute extra funds or surrender control, the US proposal faces major obstacles. For now, the frozen assets remain untouched, and no agreement on their use has been reached.
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