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

Ukraine is running out of financial resources to maintain its military and economy, after close to 48 months of Russia's full-scale war.

In the view of European leaders, the remedy to plugging Kyiv's financial shortfall of €135.7bn for the coming 24 months is found in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and EU leaders hope to finalize the plan at their EU leaders' conference next week.

Moscow's representatives warn the EU plan would be an act of theft, and Moscow's monetary authority stated on Friday it was taking to court Euroclear in a Moscow court even before a conclusive plan is made.

'Appropriate' to Use Moscow's Funds, Assert Ukraine and the EU

In total, Russia has about €210bn of its assets frozen in the EU, and €185bn of that is held by Euroclear.

Brussels and Kyiv maintain that money should be used to reconstruct what Russia has devastated: Brussels refers to it as a "reconstruction loan" and has come up with a plan to support Ukraine's economy valued at €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 ours," says Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz says the assets will "help Ukraine to shield itself effectively against future Russian attacks".

Moscow's lawsuit was expected in Brussels. But it is not just Moscow that is unhappy.

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

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

Belgian Prime Minister Bart de Wever has given Brussels a series of "logical, sensible, and warranted conditions" before he will agree to 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 Proposal?

Brussels is under pressure before next Thursday's summit to agree on a compromise that Belgium can support.

So far the EU has avoided using the frozen capital directly but since last year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the revenue is seen as permissible as Russia is sanctioned and the proceeds are not Russian sovereign property.

But global military support for Ukraine has slipped dramatically in 2025, and Europe has found it difficult to compensate for the gap resulting from the US decision to largely cease funding Ukraine under President Donald Trump.

There are currently two EU proposals designed to supplying Ukraine with €90bn, to finance a large portion of its funding needs.

• One is to raise the money on financial markets, guaranteed by 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 difficult when Hungary and Slovakia are against funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the frozen Russian funds, which were originally held in securities but have now predominantly matured into cash. That funding is owned by Euroclear located within the European Central Bank.

The EU's executive acknowledges Belgium has justified fears and says it is confident it has dealt with them.

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

If Euroclear incur losses 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 decision by a Russian court would not be recognized in the EU.

In a significant move, 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 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 "immediate threat to the economic interests of the union" continues.

Why Belgium is Remains Convinced

Brussels is firm it remains a committed partner of Ukraine, but sees legal risks in the plan and fears being left to handle the fallout if things fail.

A usually divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from other European officials.

"Belgium has a modest-sized economy. Belgian GDP is about €565bn – consider if it would need to shoulder a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

Although the EU might be able to arrange sufficient protections for the loan itself, Belgium fears an added risk of being exposed to extra legal costs.

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

"Financial institutions need to follow capital and liquidity requirements and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do exactly that.

"What is the purpose of these financial regulations? It's because we want banks to be stable. And if things turn sour it would fall to Belgium to rescue Euroclear. That's an additional reason why it's so important for Belgium to obtain ironclad protections for Euroclear."

EU Leaders Under Pressure from Every Direction

There is no time to lose, warn seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They maintain the proposal to use Russian funds is "a fiscally viable and practically possible solution".

"It's a matter of destiny for us," warns leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do afterwards. That's why we have to reach an agreement in a week's time".

While Russia is insistent its money should not be touched, there are added concerns among leaders in Europe that the US may want to deploy Russia's blocked funds in another way, as part of its own peace plan.

Zelensky has said Ukraine is coordinating with Europe and the US on a recovery fund, but he is also aware the US has been holding discussions with Russia about potential collaboration.

A preliminary version 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