Moscow Hits Back at the EU's Proposal to Loan Immobilized Russian Assets to Ukraine

Kyiv remains running out of financial resources to sustain its armed forces and economy afloat, after close to 48 months of full-scale conflict with Russia.

For Europe, the answer to addressing Kyiv's financial shortfall of €135.7bn for the coming 24 months is found in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week.

Moscow's representatives warn the EU plan would be an confiscation, and Moscow's monetary authority stated on Friday it was taking to court Euroclear in a Moscow court ahead of a final decision is made.

'Only Fair' to Employ Russia's Funds, Assert European and Ukrainian Officials

Overall, Russia has about €210bn of its funds frozen in the EU, and €185bn of that is managed by Euroclear.

European and Ukrainian authorities argue that those funds should be used to restore what Russia has laid waste to: EU officials 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 Russia's frozen assets should be used to rebuild what Russia has devastated – and that those funds then becomes Ukraine's," says Ukrainian President Volodymyr Zelensky.

Chancellor Friedrich Merz argues the assets will "allow Ukraine to defend itself efficiently against future Russian attacks".

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

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

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

Belgium's PM Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reparations plan, and he has left open the possibility of legal action if it "carries significant risks" for his country.

Explaining the EU's Plan?

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

So far the EU has avoided touching the frozen capital directly but starting in 2024 has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the revenue is considered safe as Russia is sanctioned and the earnings are not property of the Russian state.

But international military aid for Ukraine has declined sharply in 2025, and Europe has struggled to compensate for the shortfall caused by the US decision to all but stop funding Ukraine under President Donald Trump.

There are at the moment two EU options designed to providing Ukraine with €90bn, to cover two-thirds of its budgetary necessities.

• One is to secure the capital on financial markets, secured against the EU budget as a surety. This is Belgium's favored solution but it needs a agreement by all by EU leaders and that would be difficult when Budapest and Bratislava oppose funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the Moscow's immobilized capital, which were initially held in financial instruments but have now predominantly been converted into cash. That funding is owned by Euroclear located within the European Central Bank.

The EU's executive acknowledges Belgium has justified fears and claims it is confident it has dealt with them.

The proposal is for Belgium to be shielded with a guarantee 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 clearing house which are in the EU.

If Russia took legal action against Belgium itself, any judgment by a Russian court would not be enforced in the EU.

In a significant move, EU ambassadors are set to approve on Friday to freeze indefinitely Russia's central bank assets held in Europe indefinitely.

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

The EU ambassadors are expected to use an extraordinary measure under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "direct danger to the economic security of the union" continues.

The Reasons Belgium is Not Yet Convinced

Brussels is insistent it remains a committed partner of Ukraine, but identifies legal risks in the plan and fears being left to handle the fallout if things go wrong.

A typically divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is facing pressure from fellow EU leaders.

"The Belgian economy is not large. Belgian GDP is about €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, expert in financial law at KU Leuven University.

Although the EU might be able to obtain sufficient guarantees 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 grant a loan to the EU would violate EU banking regulations.

"Financial institutions need to comply with stability regulations and shouldn't concentrate risk. Now the EU is telling Euroclear to do just that.

"Why do we have these bank rules? It's because we want banks to be solvent. And if things fail it would become the responsibility of Belgium to rescue Euroclear. That's an additional reason why it's so crucial for Belgium to secure absolute protections for Euroclear."

The European Union In a Difficult Position from Multiple Fronts

The situation is urgent, warn seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the proposal to use Russian funds is "a economically realistic and politically achievable solution".

"It is a decisive moment for us," warns 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".

While Russia is unyielding its money should not be used, there are additional apprehensions among EU officials that the US may want to deploy Russia's immobilized billions differently, as part of its own diplomatic proposal.

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

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