Moscow Responds at the EU's Scheme to Loan Immobilized Russian Cash to Kyiv

Kyiv remains depleting its financial resources to keep going its military and economy, after close to 48 months of Russia's full-scale war.

In the view of European leaders, the answer to addressing Ukraine's financial shortfall of €135.7bn for the following biennium rests with assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and EU leaders seek to sign that off at their Brussels summit next week.

Russian officials caution the EU plan would be an act of theft, and the Central Bank of Russia declared on Friday it was taking to court Euroclear in a Moscow court prior to a conclusive plan is made.

'Only Fair' to Use Russia's Assets, Argue Ukraine and the EU

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

The EU and Ukraine contend that those funds should be used to reconstruct what Russia has laid waste to: Brussels refers to it as a "reparations loan" and has devised a plan to prop up Ukraine's economy valued at €90bn.

"It's only fair that Russia's frozen assets should be used to rebuild what Russia has devastated – and that those funds then becomes ours," says Ukrainian President Volodymyr Zelensky.

German Chancellor Friedrich Merz argues the assets will "enable Ukraine to protect itself effectively against future Russian attacks".

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

Belgium is worried it will be left with an enormous bill if it all fails, and Euroclear chief executive Valérie Urbain argues using the assets could "undermine the global financial architecture".

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

Belgian Prime Minister Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will agree to 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 Proposal?

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

Until now 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 amounted to €3.7bn. Legally, using the revenue is seen as permissible as Russia is under sanction and the returns are not property of the Russian state.

But international military aid for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to cover the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump.

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

• Option one is to secure the capital on the markets, guaranteed by the EU budget as a collateral. This is Belgium's preferred option but it demands a unanimous vote by EU leaders and that would be problematic when Budapest and Bratislava oppose funding Ukraine's military.
• That leaves lending Ukraine cash from the Russian assets, which were originally held in financial instruments but have now largely been converted into cash. That capital is Euroclear property deposited at the European Central Bank.

Brussels' executive arm acknowledges Belgium has legitimate concerns and states it is convinced it has resolved them.

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

If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU.

In the event that Russia went after Belgium itself, any judgment by a Russian court would not be accepted 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 permanently.

Until now they have had to vote unanimously every six months to extend 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 remain frozen as long as an "clear risk to the economic interests of the union" continues.

The Reasons Belgium is Still Not Satisfied

Belgium is adamant it remains a committed partner of Ukraine, but sees legal risks in the plan and worries about being forced to deal with the fallout if things do not work out.

A normally fractured political scene 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 around €565bn – think about if it would need to shoulder a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University.

Although the EU might be able to obtain sufficient assurances for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra legal costs.

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

"Financial institutions need to adhere to capital and liquidity requirements and shouldn't put all their eggs in one basket. Now the EU is asking Euroclear to do just that.

"What is the purpose of these bank rules? It's because we want banks to be secure. And if things fail it would become the responsibility of Belgium to rescue Euroclear. That's an additional reason why it's so vital for Belgium to obtain absolute assurances for Euroclear."

Europe Facing Strain from Every Direction

The situation is urgent, warn a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "a financially feasible and politically realistic solution".

"It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do subsequently. That's why we have to finalize the deal in a week's time".

Although Russia is insistent its money should not be used, there are additional apprehensions among EU officials that the US may want to employ Russia's blocked funds differently, as part of its own peace initiative.

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

An early draft 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