Moscow Responds at the EU's Plan to Loan Immobilized Russian Assets to Ukraine

Kyiv remains depleting its cash to maintain its military and economy, after nearly four years of full-scale conflict with Russia.

For Europe, the solution to filling Kyiv's funding gap of €135.7bn for the next two years rests with Moscow's immobilized funds held by Belgian bank Euroclear, and EU leaders aim to give it the green light at their EU leaders' conference next week.

Authorities in Russia caution the EU plan would be an confiscation, and Russia's central bank stated on Friday it was suing Euroclear in a Moscow court even before a definitive agreement is made.

'Only Fair' to Employ Russia's Assets, Argue Kyiv and Brussels

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

The EU and Ukraine argue that money should be used to reconstruct what Russia has destroyed: EU officials calls it a "reconstruction loan" and has devised a plan to bolster Ukraine's economy amounting to €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 ours," states Ukrainian President Volodymyr Zelensky.

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

Moscow's lawsuit was expected in Brussels. But it is not only Moscow that is concerned.

The Belgian government is anxious it will be burdened by an huge bill if it all backfires, and Euroclear CEO Valérie Urbain says using the assets could "destabilise the global financial architecture".

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

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

What is the EU's Strategy?

The EU is under pressure ahead of next Thursday's summit to finalize a solution that Belgium can accept.

Previously the EU has held off accessing the principal funds directly but starting in 2024 has transferred the "excess income" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the interest is considered safe as Russia is sanctioned and the earnings are not Russian sovereign property.

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

There are presently two EU proposals designed to providing Ukraine with €90bn, to pay for a majority of its funding needs.

• The first is to raise the money on capital markets, secured against the EU budget as a surety. This is Belgium's favored solution but it needs a unanimous vote by EU leaders and that would be problematic when Budapest and Bratislava are against funding Ukraine's military.
• That leaves loaning Ukraine cash from the frozen Russian funds, which were at first held in securities but have now largely matured into cash. That funding is Euroclear property located within the European Central Bank.

The European Commission accepts Belgium has justified fears and claims it is confident it has dealt with them.

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

If Euroclear incur losses of its own assets in Russia, the loss would be compensated 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 accepted in the EU.

In a significant move, EU ambassadors are set to approve on Friday to freeze indefinitely Russia's central bank assets held in Europe indefinitely.

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

The EU ambassadors are planning to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "clear risk to the economic security of the union" continues.

The Reasons Belgium is Still Not Convinced

Belgium is firm it remains a committed partner of Ukraine, but identifies regulatory pitfalls in the plan and worries about being left to handle the repercussions if things fail.

A typically fractured political scene in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from other European officials.

"The Belgian economy is not large. Belgian GDP is approximately €565bn – think about if it would need to shoulder a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

While the EU might be able to secure enough protections for the loan itself, Belgium worries about an further exposure of being exposed to extra fines or liabilities.

Prof Colaert also believes the stipulation for Euroclear to issue credit to the EU would violate EU banking regulations.

"Banks need to comply with 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 go wrong it would fall to Belgium to rescue Euroclear. That's an additional reason why it's so vital for Belgium to secure absolute protections for Euroclear."

The European Union Under Pressure from All Sides

Time is of the essence, warn a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "a financially feasible and politically realistic solution".

"It's a matter of destiny 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 finalize the deal in a week's time".

Although Russia is unyielding its money should not be accessed, there are further worries among leaders in Europe that the US may want to use Russia's immobilized billions in another way, as part of its own peace plan.

Zelensky has indicated Ukraine is coordinating with Europe and the US on a recovery fund, but he is also aware the US has been talking to Russia about future co-operation.

An initial document of the US peace plan referred to $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving