Moscow Hits Back at Europe's Scheme to Loan Immobilized Moscow's Assets to Kyiv

Ukraine is depleting its financial resources to sustain its armed forces and economy, after close to 48 months of Russia's full-scale war.

From the EU's perspective, the solution to filling Ukraine's budget hole of €135.7bn for the coming 24 months is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels aim to finalize the plan at their meeting in Brussels 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 taking to court Euroclear in a Moscow court prior to a final decision is made.

'Just' to Employ Russia's Funds, Argue Kyiv and Brussels

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

Brussels and Kyiv argue that that capital should be used to rebuild what Russia has destroyed: EU officials terms it a "reparations loan" and has proposed a plan to bolster 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 destroyed – and that that capital then becomes Ukraine's," says Ukrainian President Volodymyr Zelensky.

Chancellor Friedrich Merz states the assets will "help Ukraine to defend itself effectively against future Russian attacks".

The legal move by Moscow was anticipated in Brussels. But it is not only Moscow that is concerned.

Authorities in Brussels is concerned it will be left with an massive bill if it all goes wrong, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the global financial architecture".

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

The leader of Belgium Bart de Wever has given Brussels a series of "logical, sensible, and warranted conditions" before he will endorse the reparations plan, and he has not excluded legal action if it "carries significant risks" for his country.

What is the EU's Plan?

European Union officials is working to the wire before next Thursday's summit to finalize a compromise that Belgium can accept.

Until now the EU has held off touching the assets themselves directly but since last year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the revenue is deemed permissible as Russia is sanctioned and the proceeds are not Russian sovereign property.

But foreign defense assistance for Ukraine has declined sharply in 2025, and Europe has had trouble trying to compensate for the gap resulting from the US decision to largely cease funding Ukraine under President Donald Trump.

There are at the moment two EU plans designed to furnishing Ukraine with €90bn, to pay for a majority of its funding needs.

• The first is to raise the money on financial markets, guaranteed by the EU budget as a collateral. This is Belgium's preferred option but it needs a agreement by all by EU leaders and that would be difficult when two member states are against funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the frozen Russian funds, which were originally held in bonds but have now predominantly been converted into cash. That money is Euroclear property located within the European Central Bank.

The European Commission recognizes Belgium has valid worries and states it is assured it has resolved them.

The plan is for Belgium to be protected with a insurance applying to 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 settlement agency which are in the EU.

If Russia went after Belgium itself, any judgment by a Russian court would not be enforced in the EU.

As an important step, EU ambassadors are set to approve 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 constant 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.

Why Belgium is Still Not Convinced

Belgium is insistent it remains a staunch ally of Ukraine, but sees legal risks in the plan and fears being forced to deal with the repercussions if things go wrong.

A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from other European officials.

"The Belgian economy is not large. Belgian GDP is approximately €565bn – consider if it would need to bear a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

While the EU might be able to secure adequate protections for the loan itself, Belgium worries about an further exposure of being exposed to extra fines or liabilities.

Prof Colaert also believes the demand for Euroclear to grant a loan to the EU would violate EU banking regulations.

"Lenders need to follow prudential rules and shouldn't put all their eggs in one basket. Now the EU is asking Euroclear to do exactly that.

"Why do we have these bank rules? It's because we want banks to be stable. And if things fail it would be up to Belgium to rescue Euroclear. That's another reason why it's so vital for Belgium to secure absolute guarantees for Euroclear."

Europe Facing Strain from Multiple Fronts

There is no time to lose, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the frozen assets plan is "a economically realistic and politically realistic solution".

"This is a crucial test for us," warns leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do afterwards. That's why we have to reach an agreement in a week's time".

Although Russia is adamant its money should not be accessed, there are added concerns among leaders in Europe that the US may want to use Russia's blocked funds for another purpose, as part of its own peace initiative.

Zelensky has indicated Ukraine is working with Europe and the US on a rebuilding fund, but he is also cognizant the US has been talking to Russia about potential collaboration.

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