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

Kyiv remains depleting its cash to keep going its armed forces and economy, after close to 48 months of full-scale conflict with Russia.

In the view of European leaders, the remedy to filling Kyiv's financial shortfall of €135.7bn for the coming 24 months lies in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and European Union officials seek to give it the green light at their EU leaders' conference next week.

Authorities in Russia state the EU plan would be an act of theft, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a conclusive plan is made.

'Appropriate' to Employ Moscow's Funds, Argue European and Ukrainian Officials

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

The EU and Ukraine contend that that capital should be used to rebuild what Russia has destroyed: Brussels terms it a "reconstruction loan" and has come up with a plan to support Ukraine's economy to the tune of €90bn.

"It is only just that the assets frozen from Russia should be used to rebuild what Russia has devastated – and that those funds then becomes ours," states Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz argues the assets will "enable Ukraine to protect itself effectively against future Russian attacks".

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

The Belgian government is concerned it will be burdened by an enormous bill if it all goes wrong, and Euroclear chief executive Valérie Urbain warns using the assets could "disrupt the international financial system".

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

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

What is the EU's Plan?

The EU is racing against time before next Thursday's summit to agree on a arrangement that Belgium can accept.

Until now the EU has refrained from using the principal funds directly but since last year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the interest is deemed safe as Russia is subject to sanctions and the returns are not Russian sovereign property.

But international military aid for Ukraine has fallen significantly in 2025, and Europe has found it difficult to make up the deficit left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are at the moment two EU plans aimed at supplying Ukraine with €90bn, to finance two-thirds of its funding needs.

• Option one is to secure the capital on financial markets, secured against the EU budget as a collateral. This is Belgium's preferred option but it needs a agreement by all by EU leaders and that would be challenging when Budapest and Bratislava are against funding Ukraine's military.
• This makes the other option providing a loan of Ukraine cash from the Moscow's immobilized capital, which were at first held in financial instruments but have now predominantly matured into cash. That money is owned by Euroclear located within the European Central Bank.

The EU's executive accepts Belgium has justified fears and claims it is confident it has addressed them.

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

If Euroclear incur losses 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.

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

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

Previously 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 set to use an emergency clause under Article 122 of the EU Treaties so the assets stay blocked as long as an "direct danger to the economic security of the union" continues.

The Reasons Belgium is Not Yet Convinced

The Belgian government is adamant it remains a staunch ally of Ukraine, but identifies juridical dangers in the plan and is concerned about being left to handle the repercussions if things do not work out.

A typically divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from other European officials.

"Belgium is a small economy. Belgian GDP is approximately €565bn – think about if it would need to bear a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University.

Although the EU might be able to obtain enough protections for the loan itself, Belgium fears an added risk of being subject to extra legal costs.

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

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

"What is the purpose of these banking laws? It's because we want banks to be stable. And if things go wrong it would fall to Belgium to bail out Euroclear. That's a further cause why it's so vital for Belgium to secure absolute protections for Euroclear."

EU Leaders In a Difficult Position from All Sides

The situation is urgent, warn a group of EU member states including those neighboring 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," warns leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do afterwards. That's why we have to finalize the deal in a week's time".

While Russia is adamant its money should not be touched, there are further worries among European figures 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 coordinating 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 early draft of the US peace plan mentioned $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving