Russia Hits Back at the EU's Plan to Loan Immobilized Moscow's Cash to Ukraine

Ukraine is facing a severe shortage of financial resources to keep going its military and economy, after nearly four years of the ongoing invasion by Moscow.

From the EU's perspective, the solution to filling Kyiv's funding gap of €135.7bn for the coming 24 months is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and European Union officials aim to sign that off at their EU leaders' conference next week.

Moscow's representatives caution the EU plan would be an act of theft, and Moscow's monetary authority announced on Friday it was suing Euroclear in a Moscow court prior to a conclusive plan is made.

'Appropriate' to Utilize Russia's Funds, Say Kyiv and Brussels

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

Brussels and Kyiv maintain that that capital should be used to rebuild what Russia has destroyed: The European Commission refers to it as a "reparations loan" and has devised a plan to support Ukraine's economy valued at €90bn.

"It is only just that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that that capital then becomes Ukraine's," states Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz says the assets will "enable Ukraine to defend itself effectively against subsequent Russian attacks".

Moscow's lawsuit was foreseen in Brussels. But it is not just Moscow that is concerned.

Belgium is concerned it will be burdened by an enormous bill if it all fails, and Euroclear head Valérie Urbain argues using the assets could "undermine the global financial architecture".

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

Belgium's PM Bart de Wever has set the EU a series of "logical, sensible, and warranted conditions" before he will accept the reconstruction loan scheme, and he has not excluded legal action if it "poses significant risks" for his country.

Explaining the EU's Strategy?

The EU is under pressure before next Thursday's summit to come up with a solution that Belgium can support.

So far the EU has held off using the principal funds directly but for the past year has paid the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the interest is deemed less risky as Russia is subject to sanctions and the proceeds are not property of the Russian state.

But global military support for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to cover the gap resulting from the US decision to largely cease funding Ukraine under President Donald Trump.

There are at the moment two EU proposals designed to providing Ukraine with €90bn, to finance a large portion of its funding needs.

• One is to borrow the funds on the markets, guaranteed by the EU budget as a collateral. This is Belgium's favored solution but it demands a agreement by all by EU leaders and that would be difficult when Budapest and Bratislava are against funding Ukraine's military.
• That leaves lending Ukraine cash from the Russian assets, which were originally held in financial instruments but have now largely turned into cash. That capital is owned by Euroclear deposited at the European Central Bank.

The EU's executive recognizes Belgium has legitimate concerns and claims it is convinced it has addressed them.

The scheme is for Belgium to be protected with a assurance 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 went after Belgium itself, any judgment 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.

Previously they have had to vote all together every six months to continue the freeze, which could have meant a constant risk to Belgium.

The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets remain frozen as long as an "clear risk to the economic security of the union" continues.

Why Belgium is Still Not On Board

The Belgian government is adamant it remains a strong supporter of Ukraine, but sees legal risks in the plan and fears being shouldering the fallout if things fail.

A normally divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from European colleagues.

"The Belgian economy is not large. Belgian GDP is approximately €565bn – consider if it would need to carry a €185bn bill," notes Veerle Colaert, professor of financial law at KU Leuven University.

While the EU might be able to arrange enough assurances for the loan itself, Belgium is concerned about an added risk of being exposed to extra legal costs.

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

"Banks need to adhere to stability regulations and shouldn't make one enormous loan. Now the EU is telling Euroclear to do just that.

"What is the purpose of these banking laws? It's because we want banks to be stable. And if things fail it would be up to Belgium to save Euroclear. That's an additional reason why it's so important for Belgium to obtain water-tight guarantees for Euroclear."

Europe Facing Strain from Multiple Fronts

There is no time to lose, warn several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "a financially feasible and politically realistic solution".

"It's a matter of destiny 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 succeed in a week's time".

Although Russia is adamant its money should not be used, there are further worries among EU officials that the US may want to use Russia's frozen billions differently, as part of its own diplomatic proposal.

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

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