Russia Responds at the EU's Plan to Loan Immobilized Moscow's Cash to Kyiv

Ukraine is running out of cash to sustain its armed forces and economy, after almost four years of the ongoing invasion by Moscow.

For Europe, the solution to addressing Ukraine's budget hole of €135.7bn for the coming 24 months lies in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and European Union officials aim to sign that off at their EU leaders' conference next week.

Russian officials caution the EU plan would be an confiscation, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a definitive agreement is made.

'Only Fair' to Utilize Russia's Assets, Assert Kyiv and Brussels

All told, Russia has roughly €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear.

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

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

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

The legal move by Moscow was anticipated in Brussels. But it is not just Moscow that is unhappy.

Authorities in Brussels is worried it will be burdened by an huge bill if it all fails, and Euroclear chief executive Valérie Urbain warns using the assets could "undermine the world's financial order".

Euroclear also has an estimated €16-17bn frozen in Russia.

The leader of Belgium Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reconstruction loan scheme, and he has not excluded legal action if it "presents significant risks" for his country.

The Details of the EU's Plan?

European Union officials is under pressure prior to next Thursday's summit to come up with a compromise that Belgium can accept.

Until now the EU has refrained from using the assets themselves directly but for the past year has paid the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the profits is deemed less risky as Russia is under sanction and the proceeds are not Russian sovereign property.

But global military support for Ukraine has fallen significantly in 2025, and Europe has found it difficult to make up the shortfall caused by the US decision to virtually halt funding Ukraine under President Donald Trump.

There are presently two EU options designed to supplying Ukraine with €90bn, to pay for two-thirds of its funding needs.

• One is to secure the capital on capital markets, secured against the EU budget as a collateral. This is Belgium's preferred option but it demands a consensus by EU leaders and that would be difficult when Budapest and Bratislava oppose funding Ukraine's military.
• The alternative is lending Ukraine cash from the Russian assets, which were at first held in bonds but have now predominantly turned into cash. That money is owned by Euroclear located within the European Central Bank.

Brussels' executive arm acknowledges Belgium has valid worries and states it is confident it has addressed them.

The plan is for Belgium to be shielded with a assurance encompassing all the €210bn of Russian assets in the EU.

Should 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.

Should Russia targeted Belgium itself, any decision 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 indefinitely.

Previously they have had to vote by consensus every six months to renew the freeze, which could have meant a repeated risk to Belgium.

The EU ambassadors are planning to use an extraordinary measure under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "immediate threat to the financial well-being of the union" continues.

The Reasons Belgium is Not Yet Satisfied

Belgium is insistent it remains a staunch ally of Ukraine, but sees legal risks in the plan and is concerned about being left to handle the fallout if things go wrong.

A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from fellow EU leaders.

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

While the EU might be able to secure sufficient guarantees for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra legal costs.

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

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

"Why do we have these bank rules? It's because we want banks to be solvent. And if things turn sour it would be up to Belgium to save Euroclear. That's a further cause why it's so vital for Belgium to secure water-tight protections for Euroclear."

The European Union Facing Strain from Multiple Fronts

Time is of the essence, state several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the most financially feasible and practically possible solution".

"It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do next. That's why we have to finalize the deal in a week's time".

While Russia is adamant its money should not be used, there are additional apprehensions among EU officials that the US may want to employ Russia's immobilized billions for another purpose, as part of its own peace initiative.

Zelensky has stated Ukraine is coordinating with Europe and the US on a rebuilding fund, but he is also aware the US has been talking to Russia about future co-operation.

A preliminary version of the US peace plan referred to $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving