🔗 Share this article Russia Hits Back at Europe's Plan to Lend Frozen Russian Funds to Kyiv Ukraine is facing a severe shortage of cash 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 Kyiv's financial shortfall of €135.7bn for the coming 24 months is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week. Russian officials warn the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was suing Euroclear in a Moscow court ahead of a final decision is made. 'Just' to Utilize Russia's Assets, Say Ukraine and the EU All told, Russia has roughly €210bn of its funds blocked in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that that capital should be used to rebuild what Russia has laid waste to: Brussels calls it a "loan for reparations" and has come up with a plan to prop up Ukraine's economy amounting to €90bn. "It is only just that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that those funds then becomes ours," says Ukraine's Volodymyr Zelensky. German Chancellor Friedrich Merz argues the assets will "enable Ukraine to protect itself successfully against any future Russian attacks". Moscow's lawsuit was foreseen in Brussels. But it is not only Moscow that is unhappy. The Belgian government is concerned it will be burdened by an massive bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the global financial architecture". Euroclear also has an roughly €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 agree to the reconstruction loan scheme, and he has not excluded legal action if it "carries significant risks" for his country. The Details of the EU's Proposal? European Union officials is racing against time ahead of next Thursday's summit to come up with a arrangement that Belgium can support. Until now the EU has held off touching the principal funds directly but since last year has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is seen as safe as Russia is subject to sanctions and the proceeds are not property of the Russian state. But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has struggled to compensate for the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are currently two EU plans aimed at furnishing Ukraine with €90bn, to finance a large portion of its financial requirements. One is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's first choice but it needs a unanimous vote by EU leaders and that would be difficult when two member states are against funding Ukraine's military. This makes the other option loaning Ukraine cash from the frozen Russian funds, which were initially held in financial instruments but have now mostly matured into cash. That capital is an asset of Euroclear deposited at the European Central Bank. The European Commission accepts Belgium has legitimate concerns and states it is confident it has resolved them. The proposal is for Belgium to be shielded with a insurance covering all the €210bn of Russian assets in the EU. If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. Should Russia went after Belgium itself, any decision by a Russian court would not be enforced in the EU. In a key development, EU ambassadors are set to approve on Friday to freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future. Heretofore they have had to vote all together every six months to extend the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "immediate threat to the economic interests of the union" continues. The Reasons Belgium is Not Yet Convinced Brussels 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 repercussions if things fail. A usually partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – think about if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to arrange enough protections for the loan itself, Belgium fears an additional danger of being vulnerable to extra fines or liabilities. Prof Colaert also contends the requirement for Euroclear to provide a loan to the EU would violate EU banking regulations. "Banks need to follow prudential rules and shouldn't make one enormous loan. Now the EU is telling Euroclear to do precisely that. "What is the purpose of these financial regulations? It's because we want banks to be solvent. And if things go wrong it would be up to Belgium to rescue Euroclear. That's another reason why it's so vital for Belgium to secure absolute guarantees for Euroclear." EU Leaders In a Difficult Position from Multiple Fronts There is no time to lose, warn seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "a economically realistic and politically realistic solution". "It is a decisive moment for us," states leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do next. That's why we have to finalize the deal in a week's time". Although Russia is unyielding its money should not be used, there are further worries among EU officials that the US may want to deploy Russia's blocked funds for another purpose, as part of its own peace initiative. Zelensky has indicated 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 possible partnership. An initial document of the US peace plan mentioned $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving
Ukraine is facing a severe shortage of cash 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 Kyiv's financial shortfall of €135.7bn for the coming 24 months is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week. Russian officials warn the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was suing Euroclear in a Moscow court ahead of a final decision is made. 'Just' to Utilize Russia's Assets, Say Ukraine and the EU All told, Russia has roughly €210bn of its funds blocked in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that that capital should be used to rebuild what Russia has laid waste to: Brussels calls it a "loan for reparations" and has come up with a plan to prop up Ukraine's economy amounting to €90bn. "It is only just that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that those funds then becomes ours," says Ukraine's Volodymyr Zelensky. German Chancellor Friedrich Merz argues the assets will "enable Ukraine to protect itself successfully against any future Russian attacks". Moscow's lawsuit was foreseen in Brussels. But it is not only Moscow that is unhappy. The Belgian government is concerned it will be burdened by an massive bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the global financial architecture". Euroclear also has an roughly €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 agree to the reconstruction loan scheme, and he has not excluded legal action if it "carries significant risks" for his country. The Details of the EU's Proposal? European Union officials is racing against time ahead of next Thursday's summit to come up with a arrangement that Belgium can support. Until now the EU has held off touching the principal funds directly but since last year has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is seen as safe as Russia is subject to sanctions and the proceeds are not property of the Russian state. But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has struggled to compensate for the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are currently two EU plans aimed at furnishing Ukraine with €90bn, to finance a large portion of its financial requirements. One is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's first choice but it needs a unanimous vote by EU leaders and that would be difficult when two member states are against funding Ukraine's military. This makes the other option loaning Ukraine cash from the frozen Russian funds, which were initially held in financial instruments but have now mostly matured into cash. That capital is an asset of Euroclear deposited at the European Central Bank. The European Commission accepts Belgium has legitimate concerns and states it is confident it has resolved them. The proposal is for Belgium to be shielded with a insurance covering all the €210bn of Russian assets in the EU. If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. Should Russia went after Belgium itself, any decision by a Russian court would not be enforced in the EU. In a key development, EU ambassadors are set to approve on Friday to freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future. Heretofore they have had to vote all together every six months to extend the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "immediate threat to the economic interests of the union" continues. The Reasons Belgium is Not Yet Convinced Brussels 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 repercussions if things fail. A usually partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – think about if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to arrange enough protections for the loan itself, Belgium fears an additional danger of being vulnerable to extra fines or liabilities. Prof Colaert also contends the requirement for Euroclear to provide a loan to the EU would violate EU banking regulations. "Banks need to follow prudential rules and shouldn't make one enormous loan. Now the EU is telling Euroclear to do precisely that. "What is the purpose of these financial regulations? It's because we want banks to be solvent. And if things go wrong it would be up to Belgium to rescue Euroclear. That's another reason why it's so vital for Belgium to secure absolute guarantees for Euroclear." EU Leaders In a Difficult Position from Multiple Fronts There is no time to lose, warn seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "a economically realistic and politically realistic solution". "It is a decisive moment for us," states leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do next. That's why we have to finalize the deal in a week's time". Although Russia is unyielding its money should not be used, there are further worries among EU officials that the US may want to deploy Russia's blocked funds for another purpose, as part of its own peace initiative. Zelensky has indicated 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 possible partnership. An initial document of the US peace plan mentioned $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving