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

Ukraine is facing a severe shortage of cash to keep going its military and economy, after almost four years of Russia's full-scale war.

From the EU's perspective, the answer to filling Kyiv's financial shortfall of €135.7bn for the coming 24 months lies in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and EU leaders hope to finalize the plan at their Brussels summit next week.

Moscow's representatives state 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 final decision is made.

'Appropriate' to Utilize Russia's Assets, Say European and Ukrainian Officials

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

The EU and Ukraine argue that money should be used to restore what Russia has destroyed: Brussels calls it a "reconstruction loan" and has devised a plan to prop up Ukraine's economy to the tune of €90bn.

"It's only fair that the assets frozen from Russia should be used to rebuild what Russia has devastated – and that that capital then becomes Ukraine's," remarks Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz argues the assets will "help Ukraine to defend itself effectively against future Russian attacks".

The legal move by Moscow was anticipated in Brussels. But it is not only Moscow that is unhappy.

Belgium is anxious it will be left with an enormous bill if it all fails, and Euroclear CEO Valérie Urbain says using the assets could "undermine the world's financial order".

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

The leader of Belgium Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will endorse the reconstruction loan scheme, and he has not excluded legal action if it "presents significant risks" for his country.

What is the EU's Strategy?

European Union officials is racing against time prior to next Thursday's summit to agree on a solution that Belgium can agree to.

Previously the EU has refrained from accessing the frozen capital directly but starting in 2024 has transferred the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the revenue is considered permissible as Russia is subject to sanctions and the returns are not Russian sovereign property.

But global military support for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to compensate for the gap caused by the US decision to largely cease funding Ukraine under President Donald Trump.

There are currently two EU plans seeking to providing Ukraine with €90bn, to pay for two-thirds of its financial requirements.

• One is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's preferred option but it needs a consensus by EU leaders and that would be problematic when two member states object to funding Ukraine's military.
• That leaves lending Ukraine cash from the frozen Russian funds, which were initially held in financial instruments but have now largely matured into cash. That funding is Euroclear property located within the European Central Bank.

The EU's executive acknowledges Belgium has valid worries and states it is assured it has addressed them.

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

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

In the event that Russia targeted Belgium itself, any judgment by a Russian court would not be accepted in the EU.

In a significant move, EU ambassadors are poised to endorse on Friday to freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future.

Until now they have had to vote by consensus every six months to continue the freeze, which could have meant a ongoing risk to Belgium.

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

The Reasons Belgium is Still Not On Board

Brussels is firm it remains a strong supporter of Ukraine, but sees juridical dangers in the plan and is concerned about being left to handle the repercussions if things fail.

A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from European colleagues.

"Belgium is a small economy. Belgian GDP is about €565bn – imagine if it would need to carry a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University.

While the EU might be able to secure sufficient guarantees for the loan itself, Belgium is concerned about an additional danger of being vulnerable to extra legal costs.

Prof Colaert also argues the requirement for Euroclear to grant a loan to the EU would violate EU banking regulations.

"Lenders need to adhere to prudential rules and shouldn't concentrate risk. Now the EU is instructing Euroclear to do exactly that.

"What is the purpose of these bank rules? It's because we want banks to be solvent. And if things fail it would be up to Belgium to rescue Euroclear. That's a further cause why it's so important for Belgium to secure water-tight protections for Euroclear."

The European Union Facing Strain from Multiple Fronts

There is no time to lose, warn several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "a fiscally viable and politically realistic solution".

"This is a crucial test for us," warns leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do afterwards. That's why we have to succeed in a week's time".

While Russia is unyielding its money should not be accessed, there are added concerns among EU officials that the US may want to use Russia's immobilized billions in another way, as part of its own diplomatic proposal.

Zelensky has stated Ukraine is in discussions with Europe and the US on a rebuilding fund, but he is also aware the US has been engaging with Russia about potential collaboration.

An early draft of the US peace plan mentioned $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving