Moscow Hits Back at the EU's Plan to Lend Immobilized Russian Assets to Ukraine

Kyiv remains facing a severe shortage of financial resources to keep going its armed forces and economy, after close to 48 months of the ongoing invasion by Moscow.

For Europe, the answer to filling Ukraine's funding gap of €135.7bn for the coming 24 months is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and EU leaders aim to give it the green light at their Brussels summit next week.

Russian officials warn the EU plan would be an act of theft, and the Central Bank of Russia declared on Friday it was taking to court Euroclear in a Moscow court prior to a definitive agreement is made.

'Just' to Employ Moscow's Funds, Say Kyiv and Brussels

In total, Russia has about €210bn of its funds frozen in the EU, and €185bn of that is in the custody of Euroclear.

Brussels and Kyiv maintain that that capital should be used to rebuild what Russia has destroyed: Brussels terms it a "reparations loan" and has come up with a plan to bolster Ukraine's economy valued at €90bn.

"It is only just that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that those funds then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky.

Germany's leader Friedrich Merz says the assets will "enable Ukraine to shield itself efficiently against any future Russian attacks".

Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is dissatisfied.

Authorities in Brussels is anxious it will be burdened by an massive bill if it all fails, and Euroclear CEO Valérie Urbain warns using the assets could "destabilise the global financial architecture".

Euroclear also has an roughly €16-17bn immobilised in Russia.

Belgium's PM Bart de Wever has presented the EU with a series of "rational, reasonable, and justified conditions" before he will agree to the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country.

The Details of the EU's Plan?

The EU is under pressure before next Thursday's summit to agree on a solution that Belgium can support.

Until now the EU has refrained from using the assets themselves directly but for the past year has paid the "excess income" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the interest is considered safe as Russia is under sanction and the earnings are not Russian sovereign property.

But international military aid for Ukraine has declined sharply in 2025, and Europe has had trouble trying to make up the deficit left by the US decision to all but stop funding Ukraine under President Donald Trump.

There are presently two EU proposals designed to furnishing Ukraine with €90bn, to cover a majority of its financial requirements.

• Option one is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's first choice but it needs a unanimous vote by EU leaders and that would be difficult when two member states are against funding Ukraine's military.
• The alternative is lending Ukraine cash from the Russian assets, which were at first held in bonds but have now mostly been converted into cash. That funding is Euroclear property located within the European Central Bank.

The EU's executive recognizes Belgium has justified fears and says it is confident it has addressed them.

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

Should Euroclear incur losses of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own clearing house which are in the EU.

Should Russia went after Belgium itself, any decision by a Russian court would not be enforced in the EU.

In a key development, EU ambassadors are poised to endorse on Friday to permanently block Russia's central bank assets held in Europe for the foreseeable future.

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

The EU ambassadors are expected to use an extraordinary measure under Article 122 of the EU Treaties so the assets remain frozen as long as an "immediate threat to the economic security of the union" continues.

The Reasons Belgium is Not Yet On Board

Belgium is firm it remains a staunch ally of Ukraine, but perceives juridical dangers in the plan and worries about being shouldering the fallout if things fail.

A typically fractured political scene in this case has united behind Prime Minister Bart de Wever, who is facing pressure from European colleagues.

"Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine if it would need to bear a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

While the EU might be able to secure sufficient assurances for the loan itself, Belgium worries about an additional danger of being exposed to extra fines or liabilities.

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

"Lenders need to comply with stability regulations and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do just that.

"Why do we have these bank rules? It's because we want banks to be secure. And if things fail it would fall to Belgium to save Euroclear. That's a further cause why it's so crucial for Belgium to obtain ironclad assurances for Euroclear."

Europe Facing Strain from Multiple Fronts

The situation is urgent, warn seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "a financially feasible and politically realistic solution".

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

While Russia is insistent its money should not be touched, there are added concerns among European figures that the US may want to deploy Russia's frozen billions differently, as part of its own diplomatic proposal.

Zelensky has stated Ukraine is coordinating with Europe and the US on a recovery fund, but he is also cognizant the US has been talking to 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