Bloomberg: Germany Warms To Tapping Frozen Russian Assets For Ukraine Funds

• 21.05.2024, 11:23

Berlin has made a crucial step.

In an about face, German officials are ready to support a US plan to leverage the future revenue generated from frozen Russian assets — mostly stranded in Europe — to back $50 billion in aid to Ukraine, according to people familiar with the discussions.Germany’s assent could be a crucial step that brings Washington and its allies closer to securing a substantial new aid package for the country suffering from a full-scale invasion.

This has been reported by Bloomberg. It is noted that the G7 (Big Seven) is expected to discuss the issue this week, but a decision will not be made until mid-June.

“German officials are ready to support a US plan to leverage the future revenue generated from frozen Russian assets ... At stake is whether Ukraine’s government can remain financially viable — funding its defense and servicing its debt — through 2025,” stated in the message.

It is underlined that this way Ukraine’s staunchest backers are keen to secure medium-term financing for the embattled country and “send a signal to Moscow that support for Kyiv among G-7 allies is not faltering”.

What preceded this

Options have ranged from

outright seizure and giving the money to Ukraine;

To securitizing it to issue bonds, or using it to back some form of loan.

The proposals have been met with skepticism by several European countries. Governments led by France and Germany have voiced concerns over

The legality of such measures;

The impact such moves would have on financial stability and the euro’s appeal.