Germany has shifted its stance and now supports expanding the use of frozen Russian assets to fund Ukraine following new pressure from US president Donald Trump.

Source: Bloomberg, as reported by European Pravda

Details: European governments and their G7 allies are exploring ways to make further use of Russia's frozen assets to raise additional funds for Ukraine, according to people informed on the matter.

Most of about US$300 billion in frozen Russian assets is held in Europe. European Commission president Ursula von der Leyen said in a speech earlier this month that the EU needed to find new ways to make Russia pay for the war it is waging.

More details: Germany, which has long taken a cautious approach to safeguarding Europe's financial centre and respecting sovereign immunity, has now become a strong advocate of maximising the returns from these funds, insiders said on condition of anonymity. 

Berlin's shift follows concerns that if US support under Trump diminishes, the burden of supporting Ukraine would fall heavily on Germany's economy, the largest in Europe, possibly increasing support for German far-right parties.

EU finance ministers are expected to raise the issue at a meeting in Copenhagen this week, with EU leaders to discuss it in October, the sources said.

Background: Last week it emerged that the European Commission is preparing to propose a new mechanism for using frozen Russian assets. The approach would be to replace the frozen assets with EU bonds and direct the proceeds to Ukraine instead of direct confiscation of the capital. This approach could offer a solution for the EU and Ukraine by avoiding legal risks associated with direct expropriation while sending a strong political signal that Russia is beginning to pay for the war now.

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