Moscow Responds at the EU's Plan to Lend Immobilized Russian Cash to Kyiv

Ukraine is depleting its cash to sustain its military and economy afloat, after nearly four years of Russia's full-scale war.

In the view of European leaders, the answer to filling Ukraine's financial shortfall of €135.7bn for the following biennium lies in Moscow's immobilized funds located within Belgian bank Euroclear, and European Union officials aim to give it the green light 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 taking to court Euroclear in a Moscow court even before a definitive agreement is made.

'Just' to Employ Russia's Assets, Say Kyiv and Brussels

All told, Russia has approximately €210bn of its assets frozen in the EU, and €185bn of that is in the custody of Euroclear.

Brussels and Kyiv contend that that capital should be used to rebuild what Russia has destroyed: Brussels refers to it as a "loan for reparations" and has proposed a plan to support 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 destroyed – and that those funds then becomes Ukraine's," remarks Ukraine's Volodymyr Zelensky.

Germany's leader Friedrich Merz states the assets will "allow Ukraine to protect itself effectively against subsequent Russian attacks".

Russia's court action was expected in Brussels. But it is not just Moscow that is dissatisfied.

Belgium is concerned it will be left with an huge bill if it all goes wrong, and Euroclear head Valérie Urbain says using the assets could "disrupt the global financial architecture".

Euroclear also has an roughly €16-17bn frozen 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 left open the possibility of legal action if it "carries significant risks" for his country.

What is the EU's Proposal?

The EU is racing against time ahead of next Thursday's summit to agree on a compromise that Belgium can accept.

Until now the EU has avoided accessing the assets themselves directly but starting in 2024 has directed the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is considered permissible as Russia is subject to sanctions and the proceeds are not Moscow's sovereign assets.

But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has found it difficult to make up the deficit left by the US decision to virtually halt funding Ukraine under President Donald Trump.

There are currently two EU plans seeking to supplying Ukraine with €90bn, to finance a large portion of its financial requirements.

• One is to borrow the funds on financial markets, guaranteed by the EU budget as a surety. This is Belgium's first choice but it needs a consensus by EU leaders and that would be problematic when Hungary and Slovakia oppose funding Ukraine's military.
• This makes the other option providing a loan of Ukraine cash from the Moscow's immobilized capital, which were initially held in financial instruments but have now mostly matured into cash. That funding is an asset of Euroclear deposited at the European Central Bank.

The European Commission accepts Belgium has legitimate concerns and states it is assured it has addressed them.

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

If Euroclear suffer a loss of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own settlement agency which are in the EU.

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

In a key development, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future.

Previously they have had to vote unanimously every six months to continue the freeze, which could have meant a repeated 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 "clear risk to the economic security of the union" continues.

The Reasons Belgium is Not Yet Satisfied

The Belgian government is adamant it remains a committed partner of Ukraine, but identifies legal risks in the plan and is concerned about being shouldering the fallout if things do not work out.

A typically partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from fellow EU leaders.

"Belgium is a small economy. Belgian GDP is about €565bn – imagine if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

While the EU might be able to arrange sufficient assurances for the loan itself, Belgium worries about an additional danger of being vulnerable to extra legal costs.

Prof Colaert also believes the requirement for Euroclear to issue credit to the EU would contravene EU banking regulations.

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

"What is the purpose of these banking laws? It's because we want banks to be stable. And if things go wrong it would become the responsibility of Belgium to bail out Euroclear. That's a further cause why it's so vital for Belgium to obtain absolute protections for Euroclear."

EU Leaders Under Pressure from All Sides

There is no time to lose, caution several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the fiscally viable and politically achievable solution".

"It's a matter of destiny for us," states leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do next. That's why we have to succeed in a week's time".

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

Zelensky has said Ukraine is working with Europe and the US on a reconstruction fund, but he is also mindful the US has been talking to Russia about potential collaboration.

An initial document of the US peace plan suggested $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving