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

Kyiv remains depleting its cash to keep going its armed forces and economy afloat, after nearly four years of full-scale conflict with Russia.

In the view of European leaders, the solution to filling Kyiv's budget hole of €135.7bn for the next two years rests with Moscow's immobilized funds held by Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week.

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

'Appropriate' to Use Russia's Assets, Say Kyiv and Brussels

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

European and Ukrainian authorities contend that those funds should be used to rebuild what Russia has destroyed: EU officials refers to it as a "reparations loan" and has come up with a plan to prop up Ukraine's economy to the tune of €90bn.

"It is appropriate that Russia's frozen assets should be used to reconstruct what Russia has destroyed – and that those funds then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky.

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

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

Belgium is worried it will be burdened by an massive bill if it all fails, and Euroclear head Valérie Urbain argues using the assets could "destabilise the global financial architecture".

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

Belgium's PM Bart de Wever has given Brussels a series of "rational, reasonable, and justified conditions" before he will endorse the reconstruction loan scheme, and he has refused to rule out legal action if it "presents significant risks" for his country.

What is the EU's Plan?

European Union officials is under pressure before next Thursday's summit to finalize a arrangement that Belgium can accept.

So far the EU has avoided touching the principal funds directly but since last year has transferred the "excess income" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the revenue is deemed permissible as Russia is sanctioned and the returns are not Moscow's sovereign assets.

But global military support for Ukraine has slipped dramatically in 2025, and Europe has struggled to cover the deficit caused by the US decision to all but stop funding Ukraine under President Donald Trump.

There are currently two EU options designed to providing Ukraine with €90bn, to cover two-thirds of its budgetary necessities.

• The first is to secure the capital on capital markets, secured against the EU budget as a surety. This is Belgium's preferred option but it requires a consensus by EU leaders and that would be difficult when two member states object to funding Ukraine's military.
• That leaves providing a loan of Ukraine cash from the frozen Russian funds, which were at first held in securities but have now largely matured into cash. That money is Euroclear property located within the European Central Bank.

Brussels' executive arm acknowledges Belgium has valid worries and states it is confident it has dealt with them.

The plan is for Belgium to be safeguarded with a assurance encompassing 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 settlement agency which are in the EU.

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

As an important step, 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 unanimously every six months to renew the freeze, which could have meant a ongoing risk to Belgium.

The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "clear risk to the economic interests of the union" continues.

Why Belgium is Remains Convinced

Belgium is firm it remains a strong supporter of Ukraine, but identifies legal risks in the plan and worries about being left to handle the consequences if things do not work out.

A typically divided political landscape in this case has united behind Prime Minister Bart de Wever, who is facing pressure from other European officials.

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

While the EU might be able to obtain enough guarantees for the loan itself, Belgium fears an added risk of being exposed to extra legal costs.

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

"Banks need to follow stability regulations and shouldn't concentrate risk. Now the EU is asking Euroclear to do precisely that.

"What is the purpose of these banking laws? It's because we want banks to be solvent. And if things fail it would be up to Belgium to rescue Euroclear. That's an additional reason why it's so vital for Belgium to obtain water-tight protections for Euroclear."

The European Union In a Difficult Position from All Sides

Time is of the essence, state a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the fiscally viable and politically achievable solution".

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

While Russia is insistent its money should not be accessed, there are additional apprehensions among European figures that the US may want to employ Russia's immobilized billions differently, as part of its own diplomatic proposal.

Zelensky has indicated Ukraine is working with Europe and the US on a rebuilding fund, but he is also cognizant the US has been engaging with Russia about possible partnership.

An early draft 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