Russia Hits Back at Europe's Plan to Lend Immobilized Moscow's Assets to Ukraine

Kyiv remains running out of cash to keep going its armed forces and economy afloat, after close to 48 months of Russia's full-scale war.

In the view of European leaders, the solution to filling Ukraine's funding gap of €135.7bn for the next two years lies in frozen Russian assets located within Belgian bank Euroclear, and European Union officials aim to give it the green light at their meeting in Brussels next week.

Authorities in Russia state the EU plan would be an act of theft, and the Central Bank of Russia announced on Friday it was taking to court Euroclear in a Moscow court even before a final decision is made.

'Just' to Use Moscow's Funds, Assert Ukraine and the EU

All told, Russia has approximately €210bn of its assets immobilized in the EU, and €185bn of that is held by Euroclear.

Brussels and Kyiv argue that that capital should be used to reconstruct what Russia has devastated: The European Commission calls it a "reparations loan" and has devised a plan to support Ukraine's economy valued at €90bn.

"It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has devastated – and that that capital then becomes ours," says Ukraine's Volodymyr Zelensky.

Germany's leader Friedrich Merz says the assets will "allow Ukraine to shield itself successfully against any future Russian attacks".

Russia's court action was anticipated in Brussels. But it is not just Moscow that is unhappy.

Authorities in Brussels is anxious it will be saddled with an enormous bill if it all goes wrong, and Euroclear head Valérie Urbain says using the assets could "undermine the international financial system".

Euroclear also has an roughly €16-17bn immobilised in Russia.

The leader of Belgium Bart de Wever has set the EU a series of "logical, sensible, and warranted conditions" before he will accept the reparations plan, and he has left open the possibility of legal action if it "poses significant risks" for his country.

What is the EU's Proposal?

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

Previously the EU has avoided touching the principal funds directly but since last year has paid the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is deemed permissible as Russia is under sanction and the returns are not property of the Russian state.

But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has found it difficult to make up the deficit caused by the US decision to largely cease 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 financial requirements.

• One is to raise the money on financial markets, backed by the EU budget as a collateral. This is Belgium's preferred option 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 providing a loan of Ukraine cash from the frozen Russian funds, 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.

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

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

If Euroclear incur losses 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.

Should Russia took legal action against Belgium itself, any ruling by a Russian court would not be recognized in the EU.

As an important step, EU ambassadors are poised to endorse on Friday to immobilise Russia's central bank assets held in Europe permanently.

Heretofore they have had to vote unanimously every six months to continue the freeze, which could have meant a ongoing 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 "clear risk to the economic security of the union" continues.

Why Belgium is Remains Satisfied

Brussels is adamant it remains a staunch ally of Ukraine, but perceives juridical dangers in the plan and is concerned about being shouldering the fallout if things do not work out.

A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from other European officials.

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

While the EU might be able to obtain enough protections for the loan itself, Belgium worries about an added risk of being vulnerable to extra fines or liabilities.

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

"Financial institutions need to comply with stability regulations and shouldn't make one enormous loan. Now the EU is telling Euroclear to do exactly that.

"Why do we have these financial regulations? It's because we want banks to be solvent. And if things turn sour it would be up to Belgium to bail out Euroclear. That's a further cause why it's so crucial for Belgium to get absolute guarantees for Euroclear."

Europe Facing Strain from All Sides

There is no time to lose, warn seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "a economically realistic and practically possible solution".

"It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do subsequently. That's why we have to reach an agreement in a week's time".

While Russia is adamant its money should not be accessed, 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 plan.

Zelensky has stated Ukraine is working with Europe and the US on a reconstruction fund, but he is also aware the US has been engaging with Russia about possible partnership.

An initial document of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving