🔗 Share this article Russia Retaliates at the EU's Plan to Lend Frozen Moscow's Funds to Kyiv Kyiv remains depleting its cash to maintain its military and economy afloat, after close to 48 months of Russia's full-scale war. For Europe, the remedy to addressing Ukraine's budget hole of €135.7bn for the coming 24 months lies in frozen Russian assets held by Belgian bank Euroclear, and EU leaders hope to finalize the plan at their EU leaders' conference next week. Moscow's representatives state the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was initiating legal action against Euroclear in a Moscow court prior to a definitive agreement is made. 'Just' to Utilize Russia's Funds, Say European and Ukrainian Officials All told, Russia has approximately €210bn of its funds immobilized in the EU, and €185bn of that is in the custody of Euroclear. The EU and Ukraine argue that those funds should be used to reconstruct what Russia has destroyed: EU officials refers to it as a "loan for reparations" and has come up with a plan to support Ukraine's economy to the tune of €90bn. "It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has devastated – and that money then becomes ours," says Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "enable Ukraine to defend itself effectively against subsequent Russian attacks". Russia's court action was foreseen in Brussels. But it is not only Moscow that is unhappy. Belgium is concerned it will be burdened by an massive bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "disrupt the international financial system". Euroclear also has an estimated €16-17bn frozen in Russia. The leader of Belgium Bart de Wever has presented the EU with a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country. The Details of the EU's Plan? Brussels is racing against time before next Thursday's summit to come up with a arrangement that Belgium can agree to. So far the EU has held off using the frozen capital directly but starting in 2024 has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the interest is considered safe as Russia is under sanction and the earnings are not property of the Russian state. But international military aid for Ukraine has fallen significantly in 2025, and Europe has found it difficult to compensate for the gap caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are currently two EU options seeking to furnishing Ukraine with €90bn, to pay for a large portion of its funding needs. One is to raise the money on capital markets, backed by the EU budget as a guarantee. This is Belgium's favored solution but it requires a agreement by all by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Moscow's immobilized capital, which were initially held in securities but have now mostly turned into cash. That funding is owned by Euroclear deposited at the European Central Bank. The EU's executive acknowledges Belgium has legitimate concerns and claims it is convinced it has resolved them. The proposal is for Belgium to be protected with a assurance covering all the €210bn of Russian assets in the EU. If Euroclear suffer a loss 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. If Russia targeted Belgium itself, any decision by a Russian court would not be recognized in the EU. In a key development, 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 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 continue to be immobilized as long as an "direct danger to the economic interests of the union" continues. The Reasons Belgium is Still Not Convinced The Belgian government is insistent it remains a strong supporter of Ukraine, but sees legal risks in the plan and fears being forced to deal with the repercussions if things fail. A usually fractured political scene in this case has united behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium is a small economy. Belgian GDP is around €565bn – think about if it would need to bear a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University. Although the EU might be able to secure adequate protections for the loan itself, Belgium worries about an additional danger of being exposed to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to comply with prudential rules 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 solvent. And if things go wrong it would be up to Belgium to bail out Euroclear. That's an additional reason why it's so important for Belgium to get absolute assurances for Euroclear." The European Union In a Difficult Position from Every Direction The situation is urgent, caution a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "a economically realistic and practically possible solution". "It's a matter of destiny for us," says 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 adamant its money should not be accessed, there are additional apprehensions among EU officials that the US may want to employ Russia's immobilized billions differently, as part of its own diplomatic proposal. Zelensky has indicated Ukraine is working with Europe and the US on a recovery fund, but he is also cognizant the US has been holding discussions with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains depleting its cash to maintain its military and economy afloat, after close to 48 months of Russia's full-scale war. For Europe, the remedy to addressing Ukraine's budget hole of €135.7bn for the coming 24 months lies in frozen Russian assets held by Belgian bank Euroclear, and EU leaders hope to finalize the plan at their EU leaders' conference next week. Moscow's representatives state the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was initiating legal action against Euroclear in a Moscow court prior to a definitive agreement is made. 'Just' to Utilize Russia's Funds, Say European and Ukrainian Officials All told, Russia has approximately €210bn of its funds immobilized in the EU, and €185bn of that is in the custody of Euroclear. The EU and Ukraine argue that those funds should be used to reconstruct what Russia has destroyed: EU officials refers to it as a "loan for reparations" and has come up with a plan to support Ukraine's economy to the tune of €90bn. "It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has devastated – and that money then becomes ours," says Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "enable Ukraine to defend itself effectively against subsequent Russian attacks". Russia's court action was foreseen in Brussels. But it is not only Moscow that is unhappy. Belgium is concerned it will be burdened by an massive bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "disrupt the international financial system". Euroclear also has an estimated €16-17bn frozen in Russia. The leader of Belgium Bart de Wever has presented the EU with a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country. The Details of the EU's Plan? Brussels is racing against time before next Thursday's summit to come up with a arrangement that Belgium can agree to. So far the EU has held off using the frozen capital directly but starting in 2024 has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the interest is considered safe as Russia is under sanction and the earnings are not property of the Russian state. But international military aid for Ukraine has fallen significantly in 2025, and Europe has found it difficult to compensate for the gap caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are currently two EU options seeking to furnishing Ukraine with €90bn, to pay for a large portion of its funding needs. One is to raise the money on capital markets, backed by the EU budget as a guarantee. This is Belgium's favored solution but it requires a agreement by all by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Moscow's immobilized capital, which were initially held in securities but have now mostly turned into cash. That funding is owned by Euroclear deposited at the European Central Bank. The EU's executive acknowledges Belgium has legitimate concerns and claims it is convinced it has resolved them. The proposal is for Belgium to be protected with a assurance covering all the €210bn of Russian assets in the EU. If Euroclear suffer a loss 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. If Russia targeted Belgium itself, any decision by a Russian court would not be recognized in the EU. In a key development, 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 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 continue to be immobilized as long as an "direct danger to the economic interests of the union" continues. The Reasons Belgium is Still Not Convinced The Belgian government is insistent it remains a strong supporter of Ukraine, but sees legal risks in the plan and fears being forced to deal with the repercussions if things fail. A usually fractured political scene in this case has united behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium is a small economy. Belgian GDP is around €565bn – think about if it would need to bear a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University. Although the EU might be able to secure adequate protections for the loan itself, Belgium worries about an additional danger of being exposed to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to comply with prudential rules 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 solvent. And if things go wrong it would be up to Belgium to bail out Euroclear. That's an additional reason why it's so important for Belgium to get absolute assurances for Euroclear." The European Union In a Difficult Position from Every Direction The situation is urgent, caution a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "a economically realistic and practically possible solution". "It's a matter of destiny for us," says 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 adamant its money should not be accessed, there are additional apprehensions among EU officials that the US may want to employ Russia's immobilized billions differently, as part of its own diplomatic proposal. Zelensky has indicated Ukraine is working with Europe and the US on a recovery fund, but he is also cognizant the US has been holding discussions with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving