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

Ukraine is running out of financial resources to keep going its military and economy, after almost four years of full-scale conflict with Russia.

From the EU's perspective, the solution to plugging Ukraine's financial shortfall of €135.7bn for the following biennium lies in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and Brussels aim to give it the green light at their meeting in Brussels next week.

Moscow's representatives caution the EU plan would be an confiscation, and Russia's central bank stated on Friday it was initiating legal action against Euroclear in a Moscow court even before a definitive agreement is made.

'Just' to Employ Moscow's Funds, Say Kyiv and Brussels

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

The EU and Ukraine maintain that money should be used to reconstruct what Russia has devastated: EU officials terms it a "reconstruction loan" and has come up with a plan to prop up Ukraine's economy amounting to €90bn.

"It is appropriate that Russia's frozen assets should be used to rebuild what Russia has devastated – and that money then becomes ours," says Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz says the assets will "allow Ukraine to protect itself successfully against future Russian attacks".

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

Authorities in Brussels is concerned it will be burdened by an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "destabilise the world's financial order".

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

Belgium's PM Bart de Wever has presented the EU with a series of "rational, reasonable, and justified conditions" before he will agree to the reconstruction loan scheme, and he has not excluded legal action if it "poses significant risks" for his country.

The Details of the EU's Plan?

The EU is under pressure ahead of next Thursday's summit to finalize a solution that Belgium can agree to.

Previously the EU has held off accessing the frozen capital directly but since last year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the interest is considered permissible as Russia is subject to sanctions and the returns are not Moscow's sovereign assets.

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

There are presently two EU proposals aimed at providing Ukraine with €90bn, to cover two-thirds of its financial requirements.

• The first is to borrow the funds on the markets, guaranteed by the EU budget as a guarantee. This is Belgium's preferred option but it demands a agreement by all by EU leaders and that would be challenging when Budapest and Bratislava are against funding Ukraine's military.
• The alternative is loaning Ukraine cash from the frozen Russian funds, which were originally held in bonds but have now largely matured into cash. That capital is owned by Euroclear deposited at the European Central Bank.

The European Commission accepts Belgium has valid worries and claims it is assured it has resolved them.

The proposal is for Belgium to be shielded with a insurance covering 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.

Should Russia took legal action against Belgium itself, any judgment by a Russian court would not be enforced in the EU.

As an important step, EU ambassadors are poised to endorse on Friday to freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future.

Heretofore 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 emergency clause 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.

The Reasons Belgium is Still Not On Board

The Belgian government is firm it remains a staunch ally of Ukraine, but identifies legal risks in the plan and fears being left to handle the consequences if things do not work out.

A usually partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from fellow EU leaders.

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

While the EU might be able to obtain sufficient protections for the loan itself, Belgium worries about an further exposure of being exposed to extra damages or penalties.

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

"Lenders need to comply with stability regulations 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 banking laws? It's because we want banks to be solvent. And if things go wrong it would fall to Belgium to save Euroclear. That's a further cause why it's so important for Belgium to obtain ironclad protections for Euroclear."

Europe Under Pressure from All Sides

Time is of the essence, state several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "the most fiscally viable and politically realistic solution".

"It is a decisive moment for us," states 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 finalize the deal in a week's time".

While Russia is insistent its money should not be touched, there are further worries among EU officials that the US may want to employ Russia's blocked funds for another purpose, as part of its own peace initiative.

Zelensky has indicated Ukraine is coordinating with Europe and the US on a rebuilding fund, but he is also aware the US has been engaging with Russia about future co-operation.

An early draft of the US peace plan mentioned $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving