European Union proposal to use frozen Russian funds for a €140bn Ukraine loan raises alarm in Berlin as businesses warn of huge losses if Moscow retaliates.
Germany could lose up to €100 billion ($116 billion), if the European Union moves forward with plans to use frozen Russian assets to finance Ukraine’s reconstruction, according to estimates cited by German media on Thursday October 23, 2025.
The warning comes as EU leaders struggle to reach consensus on a proposal to raise roughly €140 billion ($163 billion), through a so-called “reparations loan” for Kyiv, backed by Russian central bank funds seized after Moscow’s invasion in 2022.
Matthias Schepp, head of the German-Russian Chamber of Commerce, told the German Press Agency (DPA) that Berlin has more at stake than any other member state. “Germany has invested in Russia like no other country,” he said. “Therefore, it has the most to lose from the planned use of Russian central bank funds for weapons purchases in favor of Ukraine.”
German businesses reportedly hold about €100 billion ($116 billion), in assets in Russia — property, factories, and investments — that could be targeted if Moscow retaliates. Russia has previously warned that any confiscation or diversion of its frozen reserves would be treated as “theft” and could trigger countermeasures against Western companies still operating in the country.
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EU officials argue that the move would provide critical financial relief to Ukraine, which continues to face mounting defense and reconstruction costs amid the ongoing war. However, the proposal has divided member states. Belgium, where the majority of Russia’s €200 billion ($232 billion), in immobilized central bank reserves are held via the clearinghouse Euroclear, has expressed legal concerns about the measure.
Hungary has also voiced opposition. Prime Minister Viktor Orbán skipped recent Brussels talks on Ukraine, warning that such a move could undermine trust in Europe’s financial system and escalate tensions with Russia.
European Council President António Costa acknowledged the lack of agreement in a post on X, saying the EU remained committed to sustaining Ukraine’s military and financial needs over the next two years, but gave no indication of a breakthrough on the asset-use plan.
Kremlin spokesman Dmitry Peskov said earlier that redirecting Russian funds to Ukraine would “boomerang” on those involved, adding that Moscow would pursue “legal prosecution one way or another” against any attempt to appropriate its assets.
