🔗 Share this article Russia Hits Back at Europe's Scheme to Lend Frozen Moscow's Assets to Kyiv Kyiv remains running out of funding to keep going its military and economy afloat, after almost four years of full-scale conflict with Russia. For Europe, the answer to plugging Kyiv's budget hole of €135.7bn for the following biennium lies in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and EU leaders hope to finalize the plan at their Brussels summit next week. Authorities in Russia state the EU plan would be an act of theft, and Russia's central bank announced on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a definitive agreement is made. 'Appropriate' to Use Moscow's Assets, Assert Kyiv and Brussels All told, Russia has about €210bn of its funds immobilized in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities maintain that money should be used to reconstruct what Russia has devastated: EU officials refers to it as a "reparations loan" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has destroyed – and that those funds then becomes ours," says Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "help Ukraine to shield itself efficiently against subsequent Russian attacks". The legal move by Moscow was foreseen in Brussels. But it is not just Moscow that is concerned. Authorities in Brussels is concerned it will be burdened by an massive bill if it all fails, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the international financial system". Euroclear also has an approximate €16-17bn frozen in Russia. Belgian Prime Minister Bart de Wever has set the EU a series of "logical, sensible, and warranted conditions" before he will agree to the reparations plan, and he has not excluded legal action if it "presents significant risks" for his country. What is the EU's Proposal? The EU is working to the wire before next Thursday's summit to come up with a compromise that Belgium can support. Previously the EU has refrained from accessing the frozen capital directly but starting in 2024 has transferred the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is considered 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 cover the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are currently two EU proposals designed to providing Ukraine with €90bn, to cover two-thirds of its budgetary necessities. The first is to borrow the funds on financial markets, secured against 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 challenging when two member states oppose funding Ukraine's military. The alternative is lending Ukraine cash from the frozen Russian funds, which were initially held in financial instruments but have now mostly turned into cash. That money is an asset of Euroclear deposited at the European Central Bank. The European Commission recognizes Belgium has legitimate concerns and says it is assured it has addressed them. The plan is for Belgium to be safeguarded with a guarantee applying to all the €210bn of Russian assets in the EU. Should Euroclear incur losses of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU. Should Russia took legal action against Belgium itself, any ruling by a Russian court would not be accepted in the EU. As an important step, EU ambassadors are set to approve on Friday to permanently block Russia's central bank assets held in Europe permanently. Previously they have had to vote all together every six months to extend the freeze, which could have meant a ongoing risk to Belgium. The EU ambassadors are expected 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 security of the union" continues. Why Belgium is Still Not On Board The Belgian government is firm it remains a committed partner of Ukraine, but perceives legal risks in the plan and is concerned about being left to handle the consequences if things fail. A usually fractured political scene in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium is a small economy. Belgian GDP is around €565bn – imagine if it would need to shoulder a €185bn bill," notes Veerle Colaert, professor of financial law at KU Leuven University. While the EU might be able to secure sufficient guarantees for the loan itself, Belgium fears an additional danger of being subject to extra fines or liabilities. Prof Colaert also contends the requirement for Euroclear to issue credit to the EU would violate EU banking regulations. "Banks need to follow stability regulations and shouldn't make one enormous loan. Now the EU is telling Euroclear to do just that. "Why do we have these financial regulations? 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 important for Belgium to secure absolute guarantees for Euroclear." The European Union Facing Strain from Every Direction The situation is urgent, warn a group of EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "a financially feasible and politically achievable solution". "This is a crucial test for us," states leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do subsequently. That's why we have to finalize the deal in a week's time". While Russia is adamant its money should not be used, there are additional apprehensions among EU officials that the US may want to deploy Russia's frozen billions differently, as part of its own peace plan. Zelensky has said Ukraine is in discussions with Europe and the US on a reconstruction fund, but he is also cognizant the US has been holding discussions with Russia about future co-operation. 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
Kyiv remains running out of funding to keep going its military and economy afloat, after almost four years of full-scale conflict with Russia. For Europe, the answer to plugging Kyiv's budget hole of €135.7bn for the following biennium lies in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and EU leaders hope to finalize the plan at their Brussels summit next week. Authorities in Russia state the EU plan would be an act of theft, and Russia's central bank announced on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a definitive agreement is made. 'Appropriate' to Use Moscow's Assets, Assert Kyiv and Brussels All told, Russia has about €210bn of its funds immobilized in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities maintain that money should be used to reconstruct what Russia has devastated: EU officials refers to it as a "reparations loan" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has destroyed – and that those funds then becomes ours," says Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "help Ukraine to shield itself efficiently against subsequent Russian attacks". The legal move by Moscow was foreseen in Brussels. But it is not just Moscow that is concerned. Authorities in Brussels is concerned it will be burdened by an massive bill if it all fails, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the international financial system". Euroclear also has an approximate €16-17bn frozen in Russia. Belgian Prime Minister Bart de Wever has set the EU a series of "logical, sensible, and warranted conditions" before he will agree to the reparations plan, and he has not excluded legal action if it "presents significant risks" for his country. What is the EU's Proposal? The EU is working to the wire before next Thursday's summit to come up with a compromise that Belgium can support. Previously the EU has refrained from accessing the frozen capital directly but starting in 2024 has transferred the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is considered 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 cover the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are currently two EU proposals designed to providing Ukraine with €90bn, to cover two-thirds of its budgetary necessities. The first is to borrow the funds on financial markets, secured against 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 challenging when two member states oppose funding Ukraine's military. The alternative is lending Ukraine cash from the frozen Russian funds, which were initially held in financial instruments but have now mostly turned into cash. That money is an asset of Euroclear deposited at the European Central Bank. The European Commission recognizes Belgium has legitimate concerns and says it is assured it has addressed them. The plan is for Belgium to be safeguarded with a guarantee applying to all the €210bn of Russian assets in the EU. Should Euroclear incur losses of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU. Should Russia took legal action against Belgium itself, any ruling by a Russian court would not be accepted in the EU. As an important step, EU ambassadors are set to approve on Friday to permanently block Russia's central bank assets held in Europe permanently. Previously they have had to vote all together every six months to extend the freeze, which could have meant a ongoing risk to Belgium. The EU ambassadors are expected 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 security of the union" continues. Why Belgium is Still Not On Board The Belgian government is firm it remains a committed partner of Ukraine, but perceives legal risks in the plan and is concerned about being left to handle the consequences if things fail. A usually fractured political scene in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium is a small economy. Belgian GDP is around €565bn – imagine if it would need to shoulder a €185bn bill," notes Veerle Colaert, professor of financial law at KU Leuven University. While the EU might be able to secure sufficient guarantees for the loan itself, Belgium fears an additional danger of being subject to extra fines or liabilities. Prof Colaert also contends the requirement for Euroclear to issue credit to the EU would violate EU banking regulations. "Banks need to follow stability regulations and shouldn't make one enormous loan. Now the EU is telling Euroclear to do just that. "Why do we have these financial regulations? 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 important for Belgium to secure absolute guarantees for Euroclear." The European Union Facing Strain from Every Direction The situation is urgent, warn a group of EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "a financially feasible and politically achievable solution". "This is a crucial test for us," states leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do subsequently. That's why we have to finalize the deal in a week's time". While Russia is adamant its money should not be used, there are additional apprehensions among EU officials that the US may want to deploy Russia's frozen billions differently, as part of its own peace plan. Zelensky has said Ukraine is in discussions with Europe and the US on a reconstruction fund, but he is also cognizant the US has been holding discussions with Russia about future co-operation. 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