🔗 Share this article Moscow Hits Back at Europe's Scheme to Lend Frozen Moscow's Cash to Ukraine Kyiv remains facing a severe shortage of funding to keep going its military and economy afloat, after nearly four years of the ongoing invasion by Moscow. In the view of European leaders, the solution to plugging Kyiv's funding gap of €135.7bn for the next two years is found in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and EU leaders seek to finalize the plan at their EU leaders' conference next week. Moscow's representatives warn the EU plan would be an confiscation, and the Central Bank of Russia announced on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a final decision is made. 'Only Fair' to Use Russia's Assets, Say European and Ukrainian Officials Overall, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is in the custody of Euroclear. Brussels and Kyiv maintain that those funds should be used to restore what Russia has devastated: Brussels calls it a "reparations loan" and has proposed a plan to prop up Ukraine's economy valued at €90bn. "It's only fair that the assets frozen from Russia should be used to rebuild what Russia has devastated – and that those funds then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz states the assets will "allow Ukraine to protect itself successfully against subsequent Russian attacks". The legal move by Moscow was foreseen in Brussels. But it is not just Moscow that is dissatisfied. The Belgian government is anxious it will be burdened by an huge bill if it all fails, and Euroclear head Valérie Urbain says using the assets could "disrupt the international financial system". Euroclear also has an estimated €16-17bn locked in Russia. Belgium's PM Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will accept the reconstruction loan scheme, and he has left open the possibility of legal action if it "poses significant risks" for his country. What is the EU's Strategy? Brussels is under pressure prior to next Thursday's summit to finalize a compromise that Belgium can accept. So far the EU has refrained from using the principal funds directly but since last year has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is considered less risky as Russia is under sanction and the proceeds are not Russian sovereign property. But international military aid for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to compensate for the shortfall caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are presently two EU plans aimed at furnishing Ukraine with €90bn, to cover two-thirds of its financial requirements. The first is to raise the money on the markets, secured against the EU budget as a collateral. This is Belgium's favored solution but it needs a agreement by all by EU leaders and that would be difficult when Budapest and Bratislava are against funding Ukraine's military. That leaves loaning Ukraine cash from the Moscow's immobilized capital, which were originally held in bonds but have now mostly been converted into cash. That money is an asset of Euroclear deposited at the European Central Bank. Brussels' executive arm acknowledges Belgium has justified fears and says it is confident it has addressed them. The plan is for Belgium to be safeguarded with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit 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. If Russia took legal action against Belgium itself, any decision by a Russian court would not be enforced in the EU. As an important step, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe indefinitely. Heretofore they have had to vote by consensus every six months to extend the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an emergency clause 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. Why Belgium is Remains Satisfied Brussels is adamant it remains a committed partner of Ukraine, but perceives legal risks in the plan and is concerned about being forced to deal with the repercussions if things do not work out. A typically divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from other European officials. "Belgium has a modest-sized economy. Belgian GDP is around €565bn – think about if it would need to shoulder a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to arrange sufficient assurances for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra damages or penalties. Prof Colaert also argues the stipulation for Euroclear to grant a loan to the EU would contravene EU banking regulations. "Lenders need to comply with stability regulations and shouldn't put all their eggs in one basket. 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 stable. And if things turn sour it would fall to Belgium to save Euroclear. That's a further cause why it's so crucial for Belgium to get water-tight protections for Euroclear." The European Union Facing Strain from All Sides There is no time to lose, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "the most fiscally viable and practically possible solution". "It's a matter of destiny for us," warns 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 succeed in a week's time". While Russia is adamant its money should not be touched, there are further worries among leaders in Europe that the US may want to use Russia's immobilized billions for another purpose, 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 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
Kyiv remains facing a severe shortage of funding to keep going its military and economy afloat, after nearly four years of the ongoing invasion by Moscow. In the view of European leaders, the solution to plugging Kyiv's funding gap of €135.7bn for the next two years is found in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and EU leaders seek to finalize the plan at their EU leaders' conference next week. Moscow's representatives warn the EU plan would be an confiscation, and the Central Bank of Russia announced on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a final decision is made. 'Only Fair' to Use Russia's Assets, Say European and Ukrainian Officials Overall, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is in the custody of Euroclear. Brussels and Kyiv maintain that those funds should be used to restore what Russia has devastated: Brussels calls it a "reparations loan" and has proposed a plan to prop up Ukraine's economy valued at €90bn. "It's only fair that the assets frozen from Russia should be used to rebuild what Russia has devastated – and that those funds then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz states the assets will "allow Ukraine to protect itself successfully against subsequent Russian attacks". The legal move by Moscow was foreseen in Brussels. But it is not just Moscow that is dissatisfied. The Belgian government is anxious it will be burdened by an huge bill if it all fails, and Euroclear head Valérie Urbain says using the assets could "disrupt the international financial system". Euroclear also has an estimated €16-17bn locked in Russia. Belgium's PM Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will accept the reconstruction loan scheme, and he has left open the possibility of legal action if it "poses significant risks" for his country. What is the EU's Strategy? Brussels is under pressure prior to next Thursday's summit to finalize a compromise that Belgium can accept. So far the EU has refrained from using the principal funds directly but since last year has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is considered less risky as Russia is under sanction and the proceeds are not Russian sovereign property. But international military aid for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to compensate for the shortfall caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are presently two EU plans aimed at furnishing Ukraine with €90bn, to cover two-thirds of its financial requirements. The first is to raise the money on the markets, secured against the EU budget as a collateral. This is Belgium's favored solution but it needs a agreement by all by EU leaders and that would be difficult when Budapest and Bratislava are against funding Ukraine's military. That leaves loaning Ukraine cash from the Moscow's immobilized capital, which were originally held in bonds but have now mostly been converted into cash. That money is an asset of Euroclear deposited at the European Central Bank. Brussels' executive arm acknowledges Belgium has justified fears and says it is confident it has addressed them. The plan is for Belgium to be safeguarded with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit 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. If Russia took legal action against Belgium itself, any decision by a Russian court would not be enforced in the EU. As an important step, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe indefinitely. Heretofore they have had to vote by consensus every six months to extend the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an emergency clause 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. Why Belgium is Remains Satisfied Brussels is adamant it remains a committed partner of Ukraine, but perceives legal risks in the plan and is concerned about being forced to deal with the repercussions if things do not work out. A typically divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from other European officials. "Belgium has a modest-sized economy. Belgian GDP is around €565bn – think about if it would need to shoulder a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to arrange sufficient assurances for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra damages or penalties. Prof Colaert also argues the stipulation for Euroclear to grant a loan to the EU would contravene EU banking regulations. "Lenders need to comply with stability regulations and shouldn't put all their eggs in one basket. 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 stable. And if things turn sour it would fall to Belgium to save Euroclear. That's a further cause why it's so crucial for Belgium to get water-tight protections for Euroclear." The European Union Facing Strain from All Sides There is no time to lose, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "the most fiscally viable and practically possible solution". "It's a matter of destiny for us," warns 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 succeed in a week's time". While Russia is adamant its money should not be touched, there are further worries among leaders in Europe that the US may want to use Russia's immobilized billions for another purpose, 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 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