Moscow Responds at Europe's Plan to Loan Immobilized Russian Assets to Kyiv

Kyiv remains depleting its cash to sustain its armed forces and economy, after nearly four years of Russia's full-scale war.

From the EU's perspective, the answer to filling Ukraine's budget hole of €135.7bn for the following biennium rests with assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and Brussels seek to finalize the plan at their meeting in Brussels next week.

Authorities in Russia caution the EU plan would be an illegal seizure, and Russia's central bank stated on Friday it was suing Euroclear in a Moscow court ahead of a conclusive plan is made.

'Only Fair' to Employ Moscow's Funds, Say Ukraine and the EU

In total, Russia has approximately €210bn of its assets frozen in the EU, and €185bn of that is managed by Euroclear.

European and Ukrainian authorities maintain that those funds should be used to rebuild what Russia has laid waste to: The European Commission terms it a "reparations loan" and has proposed a plan to support Ukraine's economy valued at €90bn.

"It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has devastated – and that that capital then becomes ours," remarks Ukraine's Volodymyr Zelensky.

Chancellor Friedrich Merz says the assets will "help Ukraine to protect itself effectively against subsequent Russian attacks".

Russia's court action was anticipated in Brussels. But it is not just Moscow that is unhappy.

Belgium is anxious it will be left with an massive bill if it all goes wrong, and Euroclear CEO Valérie Urbain says using the assets could "destabilise the global financial architecture".

Euroclear also has an approximate €16-17bn locked in Russia.

Belgian Prime Minister Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reconstruction loan scheme, and he has left open the possibility of legal action if it "carries significant risks" for his country.

The Details of the EU's Strategy?

Brussels is racing against time prior to next Thursday's summit to finalize a arrangement that Belgium can support.

Previously the EU has held off using the assets themselves directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is deemed less risky as Russia is subject to sanctions and the proceeds are not Russian sovereign property.

But international military aid for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to cover the deficit left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are at the moment two EU plans seeking to furnishing Ukraine with €90bn, to finance a large portion of its financial requirements.

• The first is to raise the money on financial markets, guaranteed by the EU budget as a guarantee. This is Belgium's preferred option but it requires a consensus by EU leaders and that would be challenging when Budapest and Bratislava oppose funding Ukraine's military.
• The alternative is providing a loan of Ukraine cash from the Moscow's immobilized capital, which were at first held in bonds but have now mostly matured into cash. That money is an asset of Euroclear deposited at the European Central Bank.

Brussels' executive arm recognizes Belgium has legitimate concerns and states it is assured it has resolved them.

The proposal is for Belgium to be protected with a assurance applying to all the €210bn of Russian assets in the EU.

If Euroclear face a financial hit of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own settlement agency which are in the EU.

If Russia went after Belgium itself, any judgment by a Russian court would not be recognized in the EU.

In a key development, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe indefinitely.

Heretofore they have had to vote unanimously every six months to renew the freeze, which could have meant a constant risk to Belgium.

The EU ambassadors are planning to use an special provision under Article 122 of the EU Treaties so the assets remain frozen as long as an "immediate threat to the financial well-being of the union" continues.

Why Belgium is Not Yet On Board

The Belgian government is insistent it remains a staunch ally of Ukraine, but sees juridical dangers in the plan and worries about being shouldering the consequences if things go wrong.

A normally divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from fellow EU leaders.

"The Belgian economy is not large. Belgian GDP is approximately €565bn – consider if it would need to carry a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University.

Although the EU might be able to arrange adequate guarantees for the loan itself, Belgium is concerned about an added risk of being exposed to extra damages or penalties.

Prof Colaert also believes the demand for Euroclear to provide a loan to the EU would violate EU banking regulations.

"Banks need to adhere to prudential rules and shouldn't concentrate risk. Now the EU is telling Euroclear to do precisely that.

"What is the purpose of these bank rules? It's because we want banks to be solvent. And if things fail it would fall to Belgium to rescue Euroclear. That's a further cause why it's so vital for Belgium to get ironclad guarantees for Euroclear."

EU Leaders Under Pressure from Multiple Fronts

There is no time to lose, warn seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They maintain the proposal to use Russian funds is "the financially feasible and politically achievable solution".

"It is a decisive moment for us," says leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do afterwards. That's why we have to reach an agreement in a week's time".

While Russia is insistent its money should not be accessed, there are added concerns among European figures that the US may want to deploy Russia's immobilized billions for another purpose, as part of its own peace initiative.

Zelensky has said Ukraine is working with Europe and the US on a recovery fund, but he is also cognizant the US has been holding discussions with Russia about potential collaboration.

A preliminary version of the US peace plan referred to $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving