🔗 Share this article Russia Hits Back at the EU's Plan to Lend Frozen Moscow's Cash to Ukraine Ukraine is running out of financial resources to keep going its armed forces and economy, after nearly four years of full-scale conflict with Russia. For Europe, the answer to plugging Kyiv's financial shortfall of €135.7bn for the next two years is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and European Union officials aim to finalize the plan at their EU leaders' conference next week. Authorities in Russia state the EU plan would be an act of theft, and the Central Bank of Russia stated on Friday it was suing Euroclear in a Moscow court ahead of a definitive agreement is made. 'Only Fair' to Utilize Moscow's Funds, Argue Ukraine and the EU All told, Russia has roughly €210bn of its assets immobilized in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine argue that those funds should be used to restore what Russia has laid waste to: EU officials calls it a "reparations loan" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It's only fair that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that money then becomes Ukraine's," remarks Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "allow Ukraine to shield itself effectively against any future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is concerned. The Belgian government is concerned it will be left with an enormous bill if it all backfires, and Euroclear CEO Valérie Urbain says using the assets could "destabilise the global financial architecture". Euroclear also has an approximate €16-17bn frozen in Russia. The leader of Belgium Bart de Wever has presented the EU with a series of "logical, sensible, and warranted conditions" before he will endorse the reconstruction loan scheme, and he has refused to rule out legal action if it "poses significant risks" for his country. Explaining the EU's Proposal? European Union officials is racing against time prior to next Thursday's summit to finalize a solution that Belgium can support. Previously the EU has held off touching the frozen capital directly but since last year has transferred the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. Juridically, using the profits is seen as permissible as Russia is sanctioned and the returns are not property of the Russian state. But international military aid for Ukraine has declined sharply in 2025, and Europe has found it difficult to cover the shortfall left by the US decision to virtually halt funding Ukraine under President Donald Trump. There are currently two EU options designed to supplying Ukraine with €90bn, to pay for a large portion of its financial requirements. One is to borrow the funds on capital markets, backed by the EU budget as a guarantee. This is Belgium's preferred option but it demands a agreement by all by EU leaders and that would be challenging when Budapest and Bratislava are against funding Ukraine's military. That leaves lending Ukraine cash from the Moscow's immobilized capital, which were at first held in financial instruments but have now predominantly been converted into cash. That money is an asset of Euroclear located within the European Central Bank. The EU's executive accepts Belgium has valid worries and claims it is assured it has dealt with them. The scheme is for Belgium to be protected with a assurance covering all the €210bn of Russian assets in the EU. If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. Should Russia went after Belgium itself, any judgment by a Russian court would not be accepted 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 permanently. Until now they have had to vote by consensus every six months to extend the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are expected to use an emergency clause 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. The Reasons Belgium is Still Not On Board Belgium is insistent it remains a staunch ally of Ukraine, but identifies juridical dangers in the plan and is concerned about being left to handle the fallout if things fail. A normally divided political landscape in this case has united behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "The Belgian economy is not large. Belgian GDP is approximately €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to secure sufficient protections for the loan itself, Belgium worries about an added risk of being subject to extra legal costs. Prof Colaert also believes the demand for Euroclear to grant a loan to the EU would breach EU banking regulations. "Financial institutions need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is asking Euroclear to do just that. "What is the purpose of these financial regulations? It's because we want banks to be stable. And if things go wrong it would fall to Belgium to bail out Euroclear. That's an additional reason why it's so important for Belgium to secure absolute protections for Euroclear." Europe Under Pressure from Multiple Fronts There is no time to lose, warn seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "a financially feasible and politically realistic solution". "It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do subsequently. That's why we have to finalize the deal in a week's time". Although Russia is insistent its money should not be accessed, there are added concerns among leaders in Europe that the US may want to deploy Russia's frozen billions in another way, as part of its own diplomatic proposal. Zelensky has indicated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also cognizant 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
Ukraine is running out of financial resources to keep going its armed forces and economy, after nearly four years of full-scale conflict with Russia. For Europe, the answer to plugging Kyiv's financial shortfall of €135.7bn for the next two years is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and European Union officials aim to finalize the plan at their EU leaders' conference next week. Authorities in Russia state the EU plan would be an act of theft, and the Central Bank of Russia stated on Friday it was suing Euroclear in a Moscow court ahead of a definitive agreement is made. 'Only Fair' to Utilize Moscow's Funds, Argue Ukraine and the EU All told, Russia has roughly €210bn of its assets immobilized in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine argue that those funds should be used to restore what Russia has laid waste to: EU officials calls it a "reparations loan" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It's only fair that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that money then becomes Ukraine's," remarks Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "allow Ukraine to shield itself effectively against any future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is concerned. The Belgian government is concerned it will be left with an enormous bill if it all backfires, and Euroclear CEO Valérie Urbain says using the assets could "destabilise the global financial architecture". Euroclear also has an approximate €16-17bn frozen in Russia. The leader of Belgium Bart de Wever has presented the EU with a series of "logical, sensible, and warranted conditions" before he will endorse the reconstruction loan scheme, and he has refused to rule out legal action if it "poses significant risks" for his country. Explaining the EU's Proposal? European Union officials is racing against time prior to next Thursday's summit to finalize a solution that Belgium can support. Previously the EU has held off touching the frozen capital directly but since last year has transferred the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. Juridically, using the profits is seen as permissible as Russia is sanctioned and the returns are not property of the Russian state. But international military aid for Ukraine has declined sharply in 2025, and Europe has found it difficult to cover the shortfall left by the US decision to virtually halt funding Ukraine under President Donald Trump. There are currently two EU options designed to supplying Ukraine with €90bn, to pay for a large portion of its financial requirements. One is to borrow the funds on capital markets, backed by the EU budget as a guarantee. This is Belgium's preferred option but it demands a agreement by all by EU leaders and that would be challenging when Budapest and Bratislava are against funding Ukraine's military. That leaves lending Ukraine cash from the Moscow's immobilized capital, which were at first held in financial instruments but have now predominantly been converted into cash. That money is an asset of Euroclear located within the European Central Bank. The EU's executive accepts Belgium has valid worries and claims it is assured it has dealt with them. The scheme is for Belgium to be protected with a assurance covering all the €210bn of Russian assets in the EU. If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. Should Russia went after Belgium itself, any judgment by a Russian court would not be accepted 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 permanently. Until now they have had to vote by consensus every six months to extend the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are expected to use an emergency clause 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. The Reasons Belgium is Still Not On Board Belgium is insistent it remains a staunch ally of Ukraine, but identifies juridical dangers in the plan and is concerned about being left to handle the fallout if things fail. A normally divided political landscape in this case has united behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "The Belgian economy is not large. Belgian GDP is approximately €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to secure sufficient protections for the loan itself, Belgium worries about an added risk of being subject to extra legal costs. Prof Colaert also believes the demand for Euroclear to grant a loan to the EU would breach EU banking regulations. "Financial institutions need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is asking Euroclear to do just that. "What is the purpose of these financial regulations? It's because we want banks to be stable. And if things go wrong it would fall to Belgium to bail out Euroclear. That's an additional reason why it's so important for Belgium to secure absolute protections for Euroclear." Europe Under Pressure from Multiple Fronts There is no time to lose, warn seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "a financially feasible and politically realistic solution". "It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do subsequently. That's why we have to finalize the deal in a week's time". Although Russia is insistent its money should not be accessed, there are added concerns among leaders in Europe that the US may want to deploy Russia's frozen billions in another way, as part of its own diplomatic proposal. Zelensky has indicated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also cognizant 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