Russia Retaliates at the EU's Proposal to Lend Immobilized Moscow's Assets to Ukraine

Kyiv remains depleting its financial resources to sustain its armed forces and economy afloat, after close to 48 months of the ongoing invasion by Moscow.

In the view of European leaders, the answer to filling Kyiv's funding gap of €135.7bn for the following biennium rests with Moscow's immobilized funds sitting in Belgian bank Euroclear, and EU leaders seek to give it the green light at their Brussels summit next week.

Authorities in Russia caution the EU plan would be an confiscation, and Moscow's monetary authority declared on Friday it was taking to court Euroclear in a Moscow court even before a conclusive plan is made.

'Appropriate' to Employ Russia's Assets, Argue European and Ukrainian Officials

All told, Russia has approximately €210bn of its funds blocked in the EU, and €185bn of that is managed by Euroclear.

The EU and Ukraine argue that that capital should be used to reconstruct what Russia has devastated: The European Commission terms it a "reconstruction loan" and has proposed a plan to support Ukraine's economy amounting to €90bn.

"It's only fair that Russia's frozen assets should be used to rebuild what Russia has devastated – and that money then becomes ours," remarks Ukraine's Volodymyr Zelensky.

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

The legal move by Moscow was anticipated in Brussels. But it is not only Moscow that is dissatisfied.

Authorities in Brussels is anxious it will be saddled with an huge bill if it all fails, and Euroclear head Valérie Urbain argues using the assets could "disrupt the world's financial order".

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

The leader of Belgium Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reparations plan, and he has not excluded legal action if it "presents significant risks" for his country.

What is the EU's Plan?

The EU is under pressure before next Thursday's summit to agree on a solution that Belgium can support.

Previously the EU has refrained from using the assets themselves directly but since last year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the profits is seen as less risky as Russia is subject to sanctions and the returns are not Russian sovereign property.

But international military aid for Ukraine has slipped dramatically in 2025, and Europe has struggled to make up the gap left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are presently two EU options seeking to supplying Ukraine with €90bn, to pay for a majority of its budgetary necessities.

• The first is to borrow the funds on financial markets, backed by the EU budget as a surety. This is Belgium's favored solution but it needs a agreement by all by EU leaders and that would be difficult when two member states object to funding Ukraine's military.
• The alternative is providing a loan of Ukraine cash from the frozen Russian funds, which were at first held in securities but have now mostly turned into cash. That capital is Euroclear property held in the European Central Bank.

Brussels' executive arm accepts Belgium has valid worries and claims it is convinced it has dealt with them.

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

If Euroclear incur losses of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU.

If Russia went after Belgium itself, any decision by a Russian court would not be accepted 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.

Until now they have had to vote by consensus every six months to extend the freeze, which could have meant a ongoing 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 "immediate threat to the economic security of the union" continues.

The Reasons Belgium is Still Not Satisfied

Brussels is firm it remains a committed partner of Ukraine, but identifies legal risks in the plan and worries about being forced to deal with the fallout if things do not work out.

A typically fractured political scene in this case has united behind Prime Minister Bart de Wever, who is being pressured from European colleagues.

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

Although the EU might be able to obtain enough guarantees for the loan itself, Belgium is concerned about an added risk of being exposed to extra damages or penalties.

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

"Banks need to adhere to stability regulations and shouldn't concentrate risk. Now the EU is instructing Euroclear to do precisely that.

"What is the purpose of these financial regulations? It's because we want banks to be secure. And if things fail it would become the responsibility of Belgium to bail out Euroclear. That's an additional reason why it's so vital for Belgium to obtain absolute protections for Euroclear."

The European Union Under Pressure from Every Direction

Time is of the essence, caution several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "the most fiscally viable and politically realistic solution".

"It's a matter of destiny for us," states 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 use Russia's immobilized billions differently, as part of its own peace plan.

Zelensky has stated Ukraine is working with Europe and the US on a rebuilding fund, but he is also aware the US has been talking to 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