As the European Union heads into a pivotal summit today amid reduced U.S. support for Ukraine under President Donald Trump, Germany is leading the charge to secure sustained funding for Kyiv’s defence using frozen Russian assets.
German Chancellor Friedrich Merz, on December 17, reiterated Europe’s commitment, stating that the German government intends to use Russian assets to finance the Armed Forces of Ukraine for at least two more years.
“This step is not about prolonging the war, but about bringing the war to an end as soon as possible,” he stated.
The plan centres on a proposed €90 billion EU loan, backed by approximately €210 billion in frozen Russian central bank assets, which is primarily held at Belgium’s Euroclear, to fund Ukraine’s military through 2027, covering almost two-thirds of Ukraine’s estimated military and civilian funding needs for 2026-2027, according to European Commission estimates.
The initiative, gaining momentum after the EU agreed last week to freeze the assets indefinitely, is crucial because it removes a major hurdle and prevents countries friendly to Russia, like Hungary, from blocking the plan.
Why is America stepping back from this?
The United States, under President Donald Trump in 2025, has significantly reduced direct military and financial aid to Ukraine compared to the Biden era.
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This shift appears to stem from a deliberate policy that prioritizes negotiated peace talks with Russia over prolonged unconditional support for Kyiv’s defense.
- Push for faster negotiations – the US president has made ending the war through diplomacy a core goal, viewing ongoing large-scale US aid as potentially prolonging the conflict, thus halting new aid packages multiple times, in March and July 2025, to intentionally pressure Ukrainian President Volodymyr Zelenskyy into serious talks, with the aid suspended until Ukraine shows commitment to peace.
- Frustration with Ukraine and Europe – Donald Trump has criticized Zelenskyy for perceived ingratitude and reluctance to negotiate, while arguing that Europe should bear more responsibility for its own security.
He has also not sought new funding for Ukraine, a step that allows earlier commitments to slow down while encouraging European allies to step up.
- Domestic and strategic priorities- Trump wanted to prioritize replenishing the US military stocks and avoid daily wars, shifting focus to an America First approach.
The Trump administration had also expressed interest in using the assets as part of a broader peace deal, with proposals to redirect some portions toward US-led reconstruction in Ukraine, potentially generating profits for American firms, and the remainder to be put into joint U.S.-Russia investment projects to incentivize lasting peace.
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This has created tension, prompting Europe to move quickly with its own loan plan to secure the assets for direct support to Ukraine.
Chancellor Merz has been a vocal proponent, framing the loan to pressure Moscow toward genuine negotiations while ensuring Ukraine can defend itself, as Germany has pledged substantial guarantees and recently deepened bilateral defense ties with the country, including joint ventures and over €11.5 billion in commitments for air defense, drones, and artillery in 2026.
Germany-Europe plan Opposition
Some countries still oppose the plan, especially Belgium, which is demanding strong guarantees to protect itself from lawsuits and any revenge actions from Russia.
Russia has decried the move as theft and filed lawsuits against Euroclear, as the Ukrainian officials welcome the proposal as justice, arguing that the funds should offset war damages inflicted by Moscow.
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