🔗 Share this article Moscow Responds at Europe's Proposal to Loan Immobilized Russian Cash to Ukraine Kyiv remains running out of funding to maintain its armed forces and economy, after close to 48 months of Russia's full-scale war. From the EU's perspective, the solution to addressing Ukraine's financial shortfall of €135.7bn for the following biennium lies in frozen Russian assets sitting in Belgian bank Euroclear, and European Union officials hope to give it the green light at their EU leaders' conference next week. Moscow's representatives warn the EU plan would be an act of theft, and Russia's central bank stated on Friday it was suing Euroclear in a Moscow court ahead of a conclusive plan is made. 'Appropriate' to Use Moscow's Funds, Say Ukraine and the EU In total, Russia has about €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities maintain that those funds should be used to rebuild what Russia has devastated: The European Commission refers to it as a "reconstruction loan" and has proposed a plan to bolster Ukraine's economy amounting to €90bn. "It's only fair that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that those funds then becomes Ukraine's," states Ukraine's Volodymyr Zelensky. German Chancellor Friedrich Merz states the assets will "help Ukraine to protect itself efficiently against any future Russian attacks". Moscow's lawsuit was foreseen in Brussels. But it is not only Moscow that is unhappy. Authorities in Brussels is worried it will be saddled with an enormous bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "destabilise the international financial system". Euroclear also has an roughly €16-17bn immobilised in Russia. The leader of Belgium Bart de Wever has presented the EU with a series of "logical, sensible, and warranted conditions" before he will accept the reparations plan, and he has not excluded legal action if it "carries significant risks" for his country. What is the EU's Proposal? Brussels is racing against time before next Thursday's summit to finalize a solution that Belgium can agree to. Previously the EU has refrained from touching the assets themselves directly but starting in 2024 has paid the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the profits is seen as permissible as Russia is subject to sanctions 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 compensate for the gap resulting from the US decision to virtually halt funding Ukraine under President Donald Trump. There are presently two EU options aimed at providing Ukraine with €90bn, to cover two-thirds of its funding needs. Option one is to borrow the funds on the markets, backed by the EU budget as a guarantee. This is Belgium's first choice but it needs a agreement by all by EU leaders and that would be difficult when two member states oppose funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely matured into cash. That funding is Euroclear property located within the European Central Bank. The European Commission accepts Belgium has legitimate concerns and claims it is confident it has resolved them. The proposal is for Belgium to be shielded with a guarantee covering all the €210bn of Russian assets in the EU. Should 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 enforced in the EU. In a significant move, EU ambassadors are set to approve on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future. Heretofore they have had to vote by consensus every six months to renew the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an "direct danger to the economic interests of the union" continues. Why Belgium is Not Yet Satisfied The Belgian government is adamant it remains a staunch ally of Ukraine, but sees juridical dangers in the plan and is concerned about being forced to deal with the fallout if things do not work out. A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – consider if it would need to shoulder a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to obtain sufficient assurances for the loan itself, Belgium is concerned about an further exposure of being subject to extra damages or penalties. Prof Colaert also believes the demand for Euroclear to issue credit to the EU would contravene EU banking regulations. "Financial institutions need to comply with 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 financial regulations? It's because we want banks to be solvent. And if things fail it would fall to Belgium to bail out Euroclear. That's another reason why it's so vital for Belgium to secure water-tight guarantees for Euroclear." The European Union In a Difficult Position from Every Direction Time is of the essence, caution several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the proposal to use Russian funds is "the economically realistic and politically achievable solution". "It's a matter of destiny for us," says leading German conservative MP Norbert Röttgen. "If we fail, 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 unyielding its money should not be used, there are added concerns among European figures that the US may want to employ Russia's blocked funds in another way, as part of its own peace plan. Zelensky has said 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 initial document of the US peace plan mentioned $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains running out of funding to maintain its armed forces and economy, after close to 48 months of Russia's full-scale war. From the EU's perspective, the solution to addressing Ukraine's financial shortfall of €135.7bn for the following biennium lies in frozen Russian assets sitting in Belgian bank Euroclear, and European Union officials hope to give it the green light at their EU leaders' conference next week. Moscow's representatives warn the EU plan would be an act of theft, and Russia's central bank stated on Friday it was suing Euroclear in a Moscow court ahead of a conclusive plan is made. 'Appropriate' to Use Moscow's Funds, Say Ukraine and the EU In total, Russia has about €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities maintain that those funds should be used to rebuild what Russia has devastated: The European Commission refers to it as a "reconstruction loan" and has proposed a plan to bolster Ukraine's economy amounting to €90bn. "It's only fair that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that those funds then becomes Ukraine's," states Ukraine's Volodymyr Zelensky. German Chancellor Friedrich Merz states the assets will "help Ukraine to protect itself efficiently against any future Russian attacks". Moscow's lawsuit was foreseen in Brussels. But it is not only Moscow that is unhappy. Authorities in Brussels is worried it will be saddled with an enormous bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "destabilise the international financial system". Euroclear also has an roughly €16-17bn immobilised in Russia. The leader of Belgium Bart de Wever has presented the EU with a series of "logical, sensible, and warranted conditions" before he will accept the reparations plan, and he has not excluded legal action if it "carries significant risks" for his country. What is the EU's Proposal? Brussels is racing against time before next Thursday's summit to finalize a solution that Belgium can agree to. Previously the EU has refrained from touching the assets themselves directly but starting in 2024 has paid the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the profits is seen as permissible as Russia is subject to sanctions 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 compensate for the gap resulting from the US decision to virtually halt funding Ukraine under President Donald Trump. There are presently two EU options aimed at providing Ukraine with €90bn, to cover two-thirds of its funding needs. Option one is to borrow the funds on the markets, backed by the EU budget as a guarantee. This is Belgium's first choice but it needs a agreement by all by EU leaders and that would be difficult when two member states oppose funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely matured into cash. That funding is Euroclear property located within the European Central Bank. The European Commission accepts Belgium has legitimate concerns and claims it is confident it has resolved them. The proposal is for Belgium to be shielded with a guarantee covering all the €210bn of Russian assets in the EU. Should 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 enforced in the EU. In a significant move, EU ambassadors are set to approve on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future. Heretofore they have had to vote by consensus every six months to renew the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an "direct danger to the economic interests of the union" continues. Why Belgium is Not Yet Satisfied The Belgian government is adamant it remains a staunch ally of Ukraine, but sees juridical dangers in the plan and is concerned about being forced to deal with the fallout if things do not work out. A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – consider if it would need to shoulder a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to obtain sufficient assurances for the loan itself, Belgium is concerned about an further exposure of being subject to extra damages or penalties. Prof Colaert also believes the demand for Euroclear to issue credit to the EU would contravene EU banking regulations. "Financial institutions need to comply with 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 financial regulations? It's because we want banks to be solvent. And if things fail it would fall to Belgium to bail out Euroclear. That's another reason why it's so vital for Belgium to secure water-tight guarantees for Euroclear." The European Union In a Difficult Position from Every Direction Time is of the essence, caution several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the proposal to use Russian funds is "the economically realistic and politically achievable solution". "It's a matter of destiny for us," says leading German conservative MP Norbert Röttgen. "If we fail, 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 unyielding its money should not be used, there are added concerns among European figures that the US may want to employ Russia's blocked funds in another way, as part of its own peace plan. Zelensky has said 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 initial document of the US peace plan mentioned $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving