Moscow Responds at the EU's Proposal to Lend Immobilized Moscow's Cash to Ukraine

Ukraine is depleting its funding to keep going its military and economy afloat, after nearly four years of the ongoing invasion by Moscow.

In the view of European leaders, the remedy to addressing Kyiv's financial shortfall of €135.7bn for the next two years is found in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and Brussels seek to finalize the plan at their Brussels summit next week.

Authorities in Russia caution the EU plan would be an illegal seizure, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a final decision is made.

'Appropriate' to Utilize Russia's Funds, Assert Ukraine and the EU

Overall, Russia has approximately €210bn of its assets immobilized in the EU, and €185bn of that is in the custody of Euroclear.

The EU and Ukraine argue that that capital should be used to rebuild what Russia has laid waste to: EU officials refers to it as a "loan for reparations" and has devised a plan to bolster Ukraine's economy amounting to €90bn.

"It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that those funds then becomes Ukraine's," states Ukrainian President Volodymyr Zelensky.

Germany's leader Friedrich Merz states the assets will "enable Ukraine to protect itself successfully against future Russian attacks".

The legal move by Moscow was expected in Brussels. But it is not only Moscow that is dissatisfied.

Authorities in Brussels is worried it will be saddled with an massive bill if it all fails, and Euroclear CEO Valérie Urbain argues using the assets could "disrupt the world's financial order".

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

Belgium's PM Bart de Wever has presented the EU with a series of "logical, sensible, and warranted conditions" before he will endorse the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country.

What is the EU's Strategy?

European Union officials is racing against time prior to next Thursday's summit to agree on a compromise that Belgium can agree to.

So far the EU has avoided touching the frozen capital directly but for the past year has paid the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the revenue is considered safe as Russia is subject to sanctions and the proceeds are not property of the Russian state.

But foreign defense assistance for Ukraine has declined sharply in 2025, and Europe has struggled to cover the shortfall resulting from the US decision to all but stop funding Ukraine under President Donald Trump.

There are presently two EU options seeking to providing Ukraine with €90bn, to pay for two-thirds of its financial requirements.

• The first is to secure the capital on the markets, guaranteed by the EU budget as a surety. This is Belgium's first choice but it needs a consensus by EU leaders and that would be challenging when Hungary and Slovakia object to funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the Moscow's immobilized capital, which were at first held in bonds but have now mostly been converted into cash. That funding is Euroclear property deposited at the European Central Bank.

The European Commission accepts Belgium has legitimate concerns and states it is assured it has addressed them.

The scheme is for Belgium to be safeguarded with a insurance applying to all the €210bn of Russian assets in the EU.

If Euroclear face a financial hit of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own clearing house which are in the EU.

Should Russia targeted Belgium itself, any judgment by a Russian court would not be recognized in the EU.

In a significant move, EU ambassadors are expected to agree on Friday to permanently block Russia's central bank assets held in Europe permanently.

Previously 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 planning to use an emergency clause under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the financial well-being of the union" continues.

The Reasons Belgium is Not Yet Convinced

Brussels is insistent it remains a staunch ally of Ukraine, but identifies juridical dangers in the plan and worries about being left to handle the repercussions if things fail.

A usually fractured political scene in this case has come together in support of Prime Minister Bart de Wever, who is facing pressure from other European officials.

"Belgium has a modest-sized economy. Belgian GDP is around €565bn – imagine if it would need to shoulder a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University.

Although the EU might be able to obtain enough assurances for the loan itself, Belgium fears an additional danger of being vulnerable to extra fines or liabilities.

Prof Colaert also believes the stipulation for Euroclear to issue credit to the EU would violate EU banking regulations.

"Financial institutions need to follow prudential rules and shouldn't make one enormous loan. Now the EU is telling Euroclear to do precisely that.

"What is the purpose of these bank rules? It's because we want banks to be stable. And if things turn sour it would be up to Belgium to save Euroclear. That's an additional reason why it's so crucial for Belgium to get ironclad assurances for Euroclear."

Europe In a Difficult Position from Every Direction

There is no time to lose, caution several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "the most economically realistic and practically possible 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 subsequently. That's why we have to finalize the deal in a week's time".

While Russia is insistent its money should not be accessed, there are added concerns among European figures that the US may want to employ Russia's immobilized billions for another purpose, 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 mindful the US has been engaging with Russia about potential collaboration.

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