🔗 Share this article Russia Retaliates at Europe's Scheme to Lend Frozen Moscow's Cash to Ukraine Ukraine is running out of funding to sustain its military and economy afloat, after nearly four years of full-scale conflict with Russia. In the view of European leaders, the remedy to addressing Kyiv's budget hole of €135.7bn for the following biennium rests with frozen Russian assets held by Belgian bank Euroclear, and Brussels aim to give it the green light at their EU leaders' conference next week. Russian officials caution the EU plan would be an illegal seizure, and the Central Bank of Russia announced on Friday it was initiating legal action against Euroclear in a Moscow court prior to a conclusive plan is made. 'Appropriate' to Utilize Russia's Funds, Argue Ukraine and the EU Overall, Russia has roughly €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that those funds should be used to restore what Russia has devastated: Brussels terms it a "reparations loan" and has proposed a plan to prop up Ukraine's economy to the tune of €90bn. "It's only fair that the assets frozen from Russia should be used to rebuild what Russia has devastated – and that that capital then becomes Ukraine's," says Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz says the assets will "allow Ukraine to protect itself efficiently against future Russian attacks". Moscow's lawsuit was expected in Brussels. But it is not only Moscow that is dissatisfied. Belgium is worried it will be burdened by an huge bill if it all fails, and Euroclear head Valérie Urbain says using the assets could "undermine the international financial system". Euroclear also has an roughly €16-17bn frozen in Russia. Belgium's PM Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reconstruction loan scheme, and he has left open the possibility of legal action if it "carries significant risks" for his country. What is the EU's Strategy? Brussels is working to the wire prior to next Thursday's summit to come up with a solution that Belgium can accept. Previously the EU has avoided accessing the frozen capital directly but since last year has paid the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is considered permissible as Russia is sanctioned and the proceeds are not property of the Russian state. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to make up the deficit left by the US decision to virtually halt funding Ukraine under President Donald Trump. There are currently two EU options designed to furnishing Ukraine with €90bn, to cover a majority of its funding needs. One is to secure the capital on capital markets, guaranteed by the EU budget as a collateral. This is Belgium's first choice but it requires a consensus by EU leaders and that would be problematic when Hungary and Slovakia are against funding Ukraine's military. The alternative is lending Ukraine cash from the Moscow's immobilized capital, which were at first held in securities but have now mostly matured into cash. That capital is Euroclear property held in the European Central Bank. The EU's executive recognizes Belgium has legitimate concerns and says it is convinced it has dealt with them. The plan is for Belgium to be protected with a assurance applying to all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own settlement agency which are in the EU. If Russia took legal action against Belgium itself, any ruling by a Russian court would not be accepted in the EU. In a key development, EU ambassadors are poised to endorse on Friday to freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future. Until now they have had to vote unanimously every six months to continue the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are planning to use an special provision 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. The Reasons Belgium is Remains Satisfied Belgium is insistent it remains a strong supporter of Ukraine, but identifies juridical dangers in the plan and is concerned about being left to handle the repercussions if things fail. A usually divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from fellow EU leaders. "Belgium has a modest-sized economy. Belgian GDP is around €565bn – imagine if it would need to bear a €185bn bill," notes Veerle Colaert, professor of financial law at KU Leuven University. While the EU might be able to arrange adequate guarantees for the loan itself, Belgium worries about an added risk of being exposed to extra legal costs. Prof Colaert also argues the requirement for Euroclear to provide a loan to the EU would contravene EU banking regulations. "Financial institutions need to adhere to prudential rules and shouldn't put all their eggs in one basket. Now the EU is asking Euroclear to do precisely that. "Why do we have these banking laws? It's because we want banks to be solvent. And if things turn sour it would fall to Belgium to bail out Euroclear. That's an additional reason why it's so crucial for Belgium to secure water-tight protections for Euroclear." Europe Under Pressure from Multiple Fronts Time is of the essence, state several EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a financially feasible and politically achievable solution". "It is a decisive moment for us," says 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 finalize the deal in a week's time". Although Russia is insistent its money should not be touched, there are added concerns among leaders in Europe that the US may want to use Russia's blocked funds differently, as part of its own peace initiative. Zelensky has stated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also mindful the US has been engaging 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
Ukraine is running out of funding to sustain its military and economy afloat, after nearly four years of full-scale conflict with Russia. In the view of European leaders, the remedy to addressing Kyiv's budget hole of €135.7bn for the following biennium rests with frozen Russian assets held by Belgian bank Euroclear, and Brussels aim to give it the green light at their EU leaders' conference next week. Russian officials caution the EU plan would be an illegal seizure, and the Central Bank of Russia announced on Friday it was initiating legal action against Euroclear in a Moscow court prior to a conclusive plan is made. 'Appropriate' to Utilize Russia's Funds, Argue Ukraine and the EU Overall, Russia has roughly €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that those funds should be used to restore what Russia has devastated: Brussels terms it a "reparations loan" and has proposed a plan to prop up Ukraine's economy to the tune of €90bn. "It's only fair that the assets frozen from Russia should be used to rebuild what Russia has devastated – and that that capital then becomes Ukraine's," says Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz says the assets will "allow Ukraine to protect itself efficiently against future Russian attacks". Moscow's lawsuit was expected in Brussels. But it is not only Moscow that is dissatisfied. Belgium is worried it will be burdened by an huge bill if it all fails, and Euroclear head Valérie Urbain says using the assets could "undermine the international financial system". Euroclear also has an roughly €16-17bn frozen in Russia. Belgium's PM Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reconstruction loan scheme, and he has left open the possibility of legal action if it "carries significant risks" for his country. What is the EU's Strategy? Brussels is working to the wire prior to next Thursday's summit to come up with a solution that Belgium can accept. Previously the EU has avoided accessing the frozen capital directly but since last year has paid the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is considered permissible as Russia is sanctioned and the proceeds are not property of the Russian state. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to make up the deficit left by the US decision to virtually halt funding Ukraine under President Donald Trump. There are currently two EU options designed to furnishing Ukraine with €90bn, to cover a majority of its funding needs. One is to secure the capital on capital markets, guaranteed by the EU budget as a collateral. This is Belgium's first choice but it requires a consensus by EU leaders and that would be problematic when Hungary and Slovakia are against funding Ukraine's military. The alternative is lending Ukraine cash from the Moscow's immobilized capital, which were at first held in securities but have now mostly matured into cash. That capital is Euroclear property held in the European Central Bank. The EU's executive recognizes Belgium has legitimate concerns and says it is convinced it has dealt with them. The plan is for Belgium to be protected with a assurance applying to all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own settlement agency which are in the EU. If Russia took legal action against Belgium itself, any ruling by a Russian court would not be accepted in the EU. In a key development, EU ambassadors are poised to endorse on Friday to freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future. Until now they have had to vote unanimously every six months to continue the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are planning to use an special provision 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. The Reasons Belgium is Remains Satisfied Belgium is insistent it remains a strong supporter of Ukraine, but identifies juridical dangers in the plan and is concerned about being left to handle the repercussions if things fail. A usually divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from fellow EU leaders. "Belgium has a modest-sized economy. Belgian GDP is around €565bn – imagine if it would need to bear a €185bn bill," notes Veerle Colaert, professor of financial law at KU Leuven University. While the EU might be able to arrange adequate guarantees for the loan itself, Belgium worries about an added risk of being exposed to extra legal costs. Prof Colaert also argues the requirement for Euroclear to provide a loan to the EU would contravene EU banking regulations. "Financial institutions need to adhere to prudential rules and shouldn't put all their eggs in one basket. Now the EU is asking Euroclear to do precisely that. "Why do we have these banking laws? It's because we want banks to be solvent. And if things turn sour it would fall to Belgium to bail out Euroclear. That's an additional reason why it's so crucial for Belgium to secure water-tight protections for Euroclear." Europe Under Pressure from Multiple Fronts Time is of the essence, state several EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a financially feasible and politically achievable solution". "It is a decisive moment for us," says 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 finalize the deal in a week's time". Although Russia is insistent its money should not be touched, there are added concerns among leaders in Europe that the US may want to use Russia's blocked funds differently, as part of its own peace initiative. Zelensky has stated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also mindful the US has been engaging 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