🔗 Share this article Russia Retaliates at Europe's Proposal to Loan Immobilized Moscow's Funds to Kyiv Ukraine is facing a severe shortage of funding to maintain its armed forces and economy, after almost four years of the ongoing invasion by Moscow. In the view of European leaders, the remedy to plugging Kyiv's financial shortfall of €135.7bn for the next two years rests with assets belonging to Russia that are frozen held by Belgian bank Euroclear, and Brussels aim to finalize the plan at their meeting in Brussels next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia announced on Friday it was taking to court Euroclear in a Moscow court prior to a definitive agreement is made. 'Just' to Use Moscow's Assets, Argue Kyiv and Brussels Overall, Russia has approximately €210bn of its assets frozen in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that money should be used to reconstruct what Russia has destroyed: Brussels calls it a "loan for reparations" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It is appropriate that Russia's frozen assets should be used to reconstruct what Russia has destroyed – and that money then becomes ours," says Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz states the assets will "enable Ukraine to protect itself effectively against subsequent Russian attacks". Moscow's lawsuit was foreseen in Brussels. But it is not just Moscow that is unhappy. Authorities in Brussels is worried it will be saddled with an enormous bill if it all fails, and Euroclear head Valérie Urbain warns using the assets could "disrupt the global financial architecture". Euroclear also has an roughly €16-17bn immobilised in Russia. Belgium's PM Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reparations plan, and he has left open the possibility of legal action if it "carries significant risks" for his country. The Details of the EU's Plan? The EU is racing against time before next Thursday's summit to come up with a compromise that Belgium can agree to. So far the EU has avoided using the frozen capital directly but for the past year has directed the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the profits is considered less risky as Russia is under sanction and the proceeds are not property of the Russian state. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has struggled to compensate for the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are currently two EU options aimed at furnishing Ukraine with €90bn, to finance a large portion of its funding needs. One is to raise the money on the markets, backed by the EU budget as a surety. This is Belgium's first choice but it requires a consensus by EU leaders and that would be challenging when Budapest and Bratislava oppose funding Ukraine's military. That leaves providing a loan of Ukraine cash from the frozen Russian funds, which were initially held in securities but have now mostly been converted into cash. That funding is owned by Euroclear located within the European Central Bank. Brussels' executive arm recognizes Belgium has justified fears and states it is assured it has resolved them. The proposal is for Belgium to be shielded with a guarantee covering 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 settlement agency which are in the EU. In the event that Russia targeted Belgium itself, any decision by a Russian court would not be recognized 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 permanently. Heretofore they have had to vote unanimously every six months to continue the freeze, which could have meant a ongoing risk to Belgium. The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the economic interests of the union" continues. The Reasons Belgium is Still Not On Board Brussels is insistent it remains a staunch ally of Ukraine, but perceives legal risks in the plan and is concerned about being forced to deal with the fallout if things do not work out. A typically divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. Although the EU might be able to obtain enough protections for the loan itself, Belgium worries about an added risk of being exposed to extra damages or penalties. Prof Colaert also contends the demand for Euroclear to grant a loan to the EU would contravene EU banking regulations. "Banks need to comply with capital and liquidity requirements and shouldn't put all their eggs in one basket. Now the EU is asking 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 be up to Belgium to save Euroclear. That's another reason why it's so crucial for Belgium to obtain water-tight assurances for Euroclear." Europe Under Pressure from Every Direction Time is of the essence, warn several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the most fiscally viable and practically possible solution". "It is a decisive moment for us," says leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do afterwards. 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 added concerns among European figures that the US may want to deploy Russia's frozen billions in another way, as part of its own diplomatic proposal. Zelensky has stated Ukraine is working with Europe and the US on a recovery fund, but he is also aware the US has been talking to Russia about potential collaboration. An initial document of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving
Ukraine is facing a severe shortage of funding to maintain its armed forces and economy, after almost four years of the ongoing invasion by Moscow. In the view of European leaders, the remedy to plugging Kyiv's financial shortfall of €135.7bn for the next two years rests with assets belonging to Russia that are frozen held by Belgian bank Euroclear, and Brussels aim to finalize the plan at their meeting in Brussels next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia announced on Friday it was taking to court Euroclear in a Moscow court prior to a definitive agreement is made. 'Just' to Use Moscow's Assets, Argue Kyiv and Brussels Overall, Russia has approximately €210bn of its assets frozen in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that money should be used to reconstruct what Russia has destroyed: Brussels calls it a "loan for reparations" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It is appropriate that Russia's frozen assets should be used to reconstruct what Russia has destroyed – and that money then becomes ours," says Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz states the assets will "enable Ukraine to protect itself effectively against subsequent Russian attacks". Moscow's lawsuit was foreseen in Brussels. But it is not just Moscow that is unhappy. Authorities in Brussels is worried it will be saddled with an enormous bill if it all fails, and Euroclear head Valérie Urbain warns using the assets could "disrupt the global financial architecture". Euroclear also has an roughly €16-17bn immobilised in Russia. Belgium's PM Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reparations plan, and he has left open the possibility of legal action if it "carries significant risks" for his country. The Details of the EU's Plan? The EU is racing against time before next Thursday's summit to come up with a compromise that Belgium can agree to. So far the EU has avoided using the frozen capital directly but for the past year has directed the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the profits is considered less risky as Russia is under sanction and the proceeds are not property of the Russian state. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has struggled to compensate for the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are currently two EU options aimed at furnishing Ukraine with €90bn, to finance a large portion of its funding needs. One is to raise the money on the markets, backed by the EU budget as a surety. This is Belgium's first choice but it requires a consensus by EU leaders and that would be challenging when Budapest and Bratislava oppose funding Ukraine's military. That leaves providing a loan of Ukraine cash from the frozen Russian funds, which were initially held in securities but have now mostly been converted into cash. That funding is owned by Euroclear located within the European Central Bank. Brussels' executive arm recognizes Belgium has justified fears and states it is assured it has resolved them. The proposal is for Belgium to be shielded with a guarantee covering 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 settlement agency which are in the EU. In the event that Russia targeted Belgium itself, any decision by a Russian court would not be recognized 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 permanently. Heretofore they have had to vote unanimously every six months to continue the freeze, which could have meant a ongoing risk to Belgium. The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the economic interests of the union" continues. The Reasons Belgium is Still Not On Board Brussels is insistent it remains a staunch ally of Ukraine, but perceives legal risks in the plan and is concerned about being forced to deal with the fallout if things do not work out. A typically divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. Although the EU might be able to obtain enough protections for the loan itself, Belgium worries about an added risk of being exposed to extra damages or penalties. Prof Colaert also contends the demand for Euroclear to grant a loan to the EU would contravene EU banking regulations. "Banks need to comply with capital and liquidity requirements and shouldn't put all their eggs in one basket. Now the EU is asking 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 be up to Belgium to save Euroclear. That's another reason why it's so crucial for Belgium to obtain water-tight assurances for Euroclear." Europe Under Pressure from Every Direction Time is of the essence, warn several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the most fiscally viable and practically possible solution". "It is a decisive moment for us," says leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do afterwards. 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 added concerns among European figures that the US may want to deploy Russia's frozen billions in another way, as part of its own diplomatic proposal. Zelensky has stated Ukraine is working with Europe and the US on a recovery fund, but he is also aware the US has been talking to Russia about potential collaboration. An initial document of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving