🔗 Share this article Moscow Retaliates at the EU's Proposal to Loan Immobilized Moscow's Cash to Ukraine Ukraine is facing a severe shortage of financial resources to maintain its military and economy afloat, after close to 48 months of the ongoing invasion by Moscow. From the EU's perspective, the solution to filling Kyiv's funding gap of €135.7bn for the following biennium is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and EU leaders seek to finalize the plan at their meeting in Brussels next week. Authorities in Russia caution the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was suing Euroclear in a Moscow court ahead of a definitive agreement is made. 'Just' to Utilize Russia's Funds, Assert Kyiv and Brussels All told, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities argue that money should be used to rebuild what Russia has devastated: EU officials terms it a "reparations loan" and has come up with a plan to support Ukraine's economy valued at €90bn. "It's only fair that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that that capital then becomes ours," states Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "help Ukraine to protect itself efficiently against subsequent Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is concerned. Belgium is worried it will be left with an enormous bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "disrupt the international financial system". Euroclear also has an approximate €16-17bn immobilised in Russia. Belgian Prime Minister Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has left open the possibility of legal action if it "poses significant risks" for his country. The Details of the EU's Proposal? Brussels is under pressure before next Thursday's summit to agree on a arrangement that Belgium can support. Until now the EU has held off accessing the principal funds directly but starting in 2024 has paid the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is deemed less risky as Russia is sanctioned and the returns are not Moscow's sovereign assets. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has found it difficult to cover the gap left by the US decision to virtually halt funding Ukraine under President Donald Trump. There are currently two EU options aimed at providing Ukraine with €90bn, to finance a majority of its budgetary necessities. One is to secure the capital on the markets, backed by the EU budget as a guarantee. This is Belgium's first choice but it demands a consensus by EU leaders and that would be problematic when Budapest and Bratislava are against funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the frozen Russian funds, which were at first held in securities but have now mostly matured into cash. That funding is Euroclear property held in the European Central Bank. The European Commission accepts Belgium has legitimate concerns and says it is confident it has resolved them. The proposal is for Belgium to be protected with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. Should 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 permanently block Russia's central bank assets held in Europe for the foreseeable future. Until now they have had to vote unanimously every six months to renew 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 "clear risk to the economic security of the union" continues. Why Belgium is Still Not Convinced Brussels is adamant it remains a committed partner of Ukraine, but perceives juridical dangers in the plan and fears being shouldering the repercussions if things go wrong. A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from fellow EU leaders. "Belgium has a modest-sized economy. Belgian GDP is around €565bn – imagine if it would need to bear a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University. While the EU might be able to arrange enough guarantees for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra legal costs. Prof Colaert also believes the stipulation for Euroclear to provide a loan to the EU would violate EU banking regulations. "Banks need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is instructing Euroclear to do precisely that. "What is the purpose of these banking laws? It's because we want banks to be secure. And if things turn sour it would become the responsibility of Belgium to bail out Euroclear. That's a further cause why it's so crucial for Belgium to secure ironclad guarantees for Euroclear." Europe Under Pressure from All Sides There is no time to lose, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "a economically realistic and politically achievable solution". "This is a crucial test for us," states leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do next. That's why we have to succeed in a week's time". Although Russia is adamant its money should not be touched, there are added concerns among EU officials that the US may want to employ Russia's frozen billions for another purpose, as part of its own peace initiative. Zelensky has stated Ukraine is in discussions with Europe and the US on a recovery fund, but he is also aware the US has been holding discussions with Russia about future co-operation. An initial document of the US peace plan suggested $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving
Ukraine is facing a severe shortage of financial resources to maintain its military and economy afloat, after close to 48 months of the ongoing invasion by Moscow. From the EU's perspective, the solution to filling Kyiv's funding gap of €135.7bn for the following biennium is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and EU leaders seek to finalize the plan at their meeting in Brussels next week. Authorities in Russia caution the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was suing Euroclear in a Moscow court ahead of a definitive agreement is made. 'Just' to Utilize Russia's Funds, Assert Kyiv and Brussels All told, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities argue that money should be used to rebuild what Russia has devastated: EU officials terms it a "reparations loan" and has come up with a plan to support Ukraine's economy valued at €90bn. "It's only fair that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that that capital then becomes ours," states Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "help Ukraine to protect itself efficiently against subsequent Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is concerned. Belgium is worried it will be left with an enormous bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "disrupt the international financial system". Euroclear also has an approximate €16-17bn immobilised in Russia. Belgian Prime Minister Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has left open the possibility of legal action if it "poses significant risks" for his country. The Details of the EU's Proposal? Brussels is under pressure before next Thursday's summit to agree on a arrangement that Belgium can support. Until now the EU has held off accessing the principal funds directly but starting in 2024 has paid the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is deemed less risky as Russia is sanctioned and the returns are not Moscow's sovereign assets. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has found it difficult to cover the gap left by the US decision to virtually halt funding Ukraine under President Donald Trump. There are currently two EU options aimed at providing Ukraine with €90bn, to finance a majority of its budgetary necessities. One is to secure the capital on the markets, backed by the EU budget as a guarantee. This is Belgium's first choice but it demands a consensus by EU leaders and that would be problematic when Budapest and Bratislava are against funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the frozen Russian funds, which were at first held in securities but have now mostly matured into cash. That funding is Euroclear property held in the European Central Bank. The European Commission accepts Belgium has legitimate concerns and says it is confident it has resolved them. The proposal is for Belgium to be protected with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. Should 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 permanently block Russia's central bank assets held in Europe for the foreseeable future. Until now they have had to vote unanimously every six months to renew 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 "clear risk to the economic security of the union" continues. Why Belgium is Still Not Convinced Brussels is adamant it remains a committed partner of Ukraine, but perceives juridical dangers in the plan and fears being shouldering the repercussions if things go wrong. A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from fellow EU leaders. "Belgium has a modest-sized economy. Belgian GDP is around €565bn – imagine if it would need to bear a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University. While the EU might be able to arrange enough guarantees for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra legal costs. Prof Colaert also believes the stipulation for Euroclear to provide a loan to the EU would violate EU banking regulations. "Banks need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is instructing Euroclear to do precisely that. "What is the purpose of these banking laws? It's because we want banks to be secure. And if things turn sour it would become the responsibility of Belgium to bail out Euroclear. That's a further cause why it's so crucial for Belgium to secure ironclad guarantees for Euroclear." Europe Under Pressure from All Sides There is no time to lose, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "a economically realistic and politically achievable solution". "This is a crucial test for us," states leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do next. That's why we have to succeed in a week's time". Although Russia is adamant its money should not be touched, there are added concerns among EU officials that the US may want to employ Russia's frozen billions for another purpose, as part of its own peace initiative. Zelensky has stated Ukraine is in discussions with Europe and the US on a recovery fund, but he is also aware the US has been holding discussions with Russia about future co-operation. An initial document of the US peace plan suggested $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving