🔗 Share this article Russia Hits Back at the EU's Proposal to Lend Frozen Moscow's Funds to Ukraine Ukraine is running out of cash to maintain its military and economy afloat, after nearly four years of Russia's full-scale war. In the view of European leaders, the solution to filling Kyiv's budget hole of €135.7bn for the coming 24 months rests with frozen Russian assets sitting in Belgian bank Euroclear, and European Union officials hope to give it the green light at their meeting in Brussels next week. Authorities in Russia state the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was initiating legal action against Euroclear in a Moscow court even before a definitive agreement is made. 'Appropriate' to Utilize Russia's Assets, Say Ukraine and the EU Overall, Russia has approximately €210bn of its state reserves blocked in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities contend that that capital should be used to reconstruct what Russia has devastated: EU officials terms it a "loan for reparations" and has devised a plan to prop up Ukraine's economy valued at €90bn. "It is appropriate that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that that capital then becomes Ukraine's," remarks Ukraine's Volodymyr Zelensky. Chancellor Friedrich Merz states the assets will "enable Ukraine to protect itself efficiently against future Russian attacks". Russia's court action was anticipated in Brussels. But it is not only Moscow that is dissatisfied. The Belgian government is anxious it will be saddled with an enormous bill if it all backfires, and Euroclear CEO Valérie Urbain argues using the assets could "destabilise the global financial architecture". Euroclear also has an estimated €16-17bn frozen in Russia. Belgian Prime Minister Bart de Wever has given Brussels a series of "rational, reasonable, and justified conditions" before he will agree to the reconstruction loan scheme, and he has not excluded legal action if it "presents significant risks" for his country. Explaining the EU's Proposal? The EU is under pressure prior to next Thursday's summit to agree on a compromise that Belgium can accept. So far the EU has held off accessing the principal funds directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the profits is deemed safe as Russia is sanctioned and the earnings are not Russian sovereign property. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to compensate for the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU options aimed at supplying Ukraine with €90bn, to pay for a majority of its funding needs. 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 problematic when two member states oppose funding Ukraine's military. The alternative is loaning Ukraine cash from the frozen Russian funds, which were at first held in securities but have now mostly turned into cash. That money is Euroclear property deposited at the European Central Bank. The EU's executive accepts Belgium has legitimate concerns and claims it is confident it has addressed them. The scheme is for Belgium to be shielded with a insurance applying to all the €210bn of Russian assets in the EU. If Euroclear face a financial hit 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. In the event that Russia went after Belgium itself, any judgment by a Russian court would not be accepted in the EU. In a key development, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future. Previously they have had to vote unanimously every six months to renew the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are planning 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 Belgium is insistent it remains a staunch ally of Ukraine, but perceives juridical dangers in the plan and fears being shouldering 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 about €565bn – consider if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. Although the EU might be able to arrange adequate assurances for the loan itself, Belgium fears an added risk of being exposed to extra legal costs. Prof Colaert also believes the demand for Euroclear to provide a loan to the EU would breach EU banking regulations. "Lenders need to comply with capital and liquidity requirements and shouldn't concentrate risk. Now the EU is instructing Euroclear to do just that. "Why do we have these financial regulations? It's because we want banks to be stable. And if things turn sour it would be up to Belgium to rescue Euroclear. That's an additional reason why it's so vital for Belgium to obtain absolute guarantees for Euroclear." EU Leaders In a Difficult Position from Every Direction Time is of the essence, caution seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "the financially feasible and politically realistic solution". "It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do subsequently. That's why we have to succeed in a week's time". While Russia is insistent its money should not be accessed, there are additional apprehensions among leaders in Europe that the US may want to employ Russia's immobilized billions in another way, as part of its own peace initiative. Zelensky has said Ukraine is in discussions with Europe and the US on a recovery fund, but he is also cognizant the US has been holding discussions with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving
Ukraine is running out of cash to maintain its military and economy afloat, after nearly four years of Russia's full-scale war. In the view of European leaders, the solution to filling Kyiv's budget hole of €135.7bn for the coming 24 months rests with frozen Russian assets sitting in Belgian bank Euroclear, and European Union officials hope to give it the green light at their meeting in Brussels next week. Authorities in Russia state the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was initiating legal action against Euroclear in a Moscow court even before a definitive agreement is made. 'Appropriate' to Utilize Russia's Assets, Say Ukraine and the EU Overall, Russia has approximately €210bn of its state reserves blocked in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities contend that that capital should be used to reconstruct what Russia has devastated: EU officials terms it a "loan for reparations" and has devised a plan to prop up Ukraine's economy valued at €90bn. "It is appropriate that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that that capital then becomes Ukraine's," remarks Ukraine's Volodymyr Zelensky. Chancellor Friedrich Merz states the assets will "enable Ukraine to protect itself efficiently against future Russian attacks". Russia's court action was anticipated in Brussels. But it is not only Moscow that is dissatisfied. The Belgian government is anxious it will be saddled with an enormous bill if it all backfires, and Euroclear CEO Valérie Urbain argues using the assets could "destabilise the global financial architecture". Euroclear also has an estimated €16-17bn frozen in Russia. Belgian Prime Minister Bart de Wever has given Brussels a series of "rational, reasonable, and justified conditions" before he will agree to the reconstruction loan scheme, and he has not excluded legal action if it "presents significant risks" for his country. Explaining the EU's Proposal? The EU is under pressure prior to next Thursday's summit to agree on a compromise that Belgium can accept. So far the EU has held off accessing the principal funds directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the profits is deemed safe as Russia is sanctioned and the earnings are not Russian sovereign property. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to compensate for the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU options aimed at supplying Ukraine with €90bn, to pay for a majority of its funding needs. 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 problematic when two member states oppose funding Ukraine's military. The alternative is loaning Ukraine cash from the frozen Russian funds, which were at first held in securities but have now mostly turned into cash. That money is Euroclear property deposited at the European Central Bank. The EU's executive accepts Belgium has legitimate concerns and claims it is confident it has addressed them. The scheme is for Belgium to be shielded with a insurance applying to all the €210bn of Russian assets in the EU. If Euroclear face a financial hit 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. In the event that Russia went after Belgium itself, any judgment by a Russian court would not be accepted in the EU. In a key development, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future. Previously they have had to vote unanimously every six months to renew the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are planning 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 Belgium is insistent it remains a staunch ally of Ukraine, but perceives juridical dangers in the plan and fears being shouldering 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 about €565bn – consider if it would need to bear a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. Although the EU might be able to arrange adequate assurances for the loan itself, Belgium fears an added risk of being exposed to extra legal costs. Prof Colaert also believes the demand for Euroclear to provide a loan to the EU would breach EU banking regulations. "Lenders need to comply with capital and liquidity requirements and shouldn't concentrate risk. Now the EU is instructing Euroclear to do just that. "Why do we have these financial regulations? It's because we want banks to be stable. And if things turn sour it would be up to Belgium to rescue Euroclear. That's an additional reason why it's so vital for Belgium to obtain absolute guarantees for Euroclear." EU Leaders In a Difficult Position from Every Direction Time is of the essence, caution seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "the financially feasible and politically realistic solution". "It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do subsequently. That's why we have to succeed in a week's time". While Russia is insistent its money should not be accessed, there are additional apprehensions among leaders in Europe that the US may want to employ Russia's immobilized billions in another way, as part of its own peace initiative. Zelensky has said Ukraine is in discussions with Europe and the US on a recovery fund, but he is also cognizant the US has been holding discussions with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving