Germany open to backing U.S. plan to use $50B in frozen Russian assets for Ukraine aid

While Germany has not made any final decisions, the sources said Berlin is unlikely to oppose the plan outright before leaders of the Group of Seven nations meet in mid-June 2024.

The German government is prepared to support a U.S. initiative that would see $50 billion in Russian assets frozen abroad sent as aid to Ukraine, according to people familiar with the matter.

The potential deal, first proposed by the Biden administration, aims to transfer Russian funds and other assets immobilized by sanctions to Ukraine for its defence and reconstruction efforts in the ongoing war, Bloomberg News reported, citing sources who requested anonymity to discuss diplomatic deliberations.

While Germany has not made any final decisions, the sources said Berlin is unlikely to oppose the plan outright before leaders of the Group of Seven nations meet in mid-June 2024. The people also cautioned that any agreement is still months away from implementation, with 2025 being the earliest the funds could begin flowing to Kyiv.

Germany’s backing could prove crucial for the U.S. proposal to move forward given the complexity of re-purposing seized Russian assets from a range of public and private entities across multiple jurisdictions. Support from Europe’s largest economy may sway other allies to sign on.

Neither the White House nor the State Department would confirm the details when reached for comment. A German government spokesman also declined to comment on the specifics of any negotiations.

The news comes as Ukraine has issued increasingly urgent appeals for more financial support and advanced weaponry from Western partners as it aims to regain territory captured by Russia. The $50 billion figure would more than double the $46 billion in budgetary and military aid the U.S. has provided Ukraine so far.

However, legal scholars have raised concerns about violating multilateral laws and facing retaliatory Russian action over any unilateral seizure of its assets. International cooperation and an airtight legal framework may be required.

Ukrainian President Volodymyr Zelenskyy has claimed full damage from the Russian invasion already exceeds $600 billion. Western allies are under pressure to cover those immense costs as the war drags towards the end of its second year.