🔗 Share this article Moscow Hits Back at Europe's Scheme to Lend Frozen Moscow's Cash to Kyiv Kyiv remains running out of funding to maintain its military and economy, after nearly four years of full-scale conflict with Russia. From the EU's perspective, the remedy to addressing Kyiv's financial shortfall of €135.7bn for the coming 24 months rests with assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and Brussels hope to finalize the plan at their EU leaders' conference next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia stated on Friday it was taking to court Euroclear in a Moscow court ahead of a final decision is made. 'Only Fair' to Employ Moscow's Assets, Say Kyiv and Brussels Overall, Russia has about €210bn of its funds frozen in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities maintain that those funds should be used to reconstruct what Russia has devastated: Brussels refers to it as a "reparations loan" and has devised a plan to prop up Ukraine's economy valued at €90bn. "It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that those funds then becomes ours," states Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "allow Ukraine to shield itself successfully against any future Russian attacks". The legal move by Moscow was foreseen in Brussels. But it is not only Moscow that is unhappy. The Belgian government is worried it will be left with an enormous bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the world's financial order". Euroclear also has an roughly €16-17bn frozen in Russia. The leader of Belgium Bart de Wever has presented the EU with 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 "carries significant risks" for his country. Explaining the EU's Proposal? The EU is working to the wire ahead of next Thursday's summit to come up with a compromise that Belgium can support. Previously the EU has refrained from accessing the frozen capital directly but for the past year has directed the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the interest is deemed permissible as Russia is subject to sanctions and the earnings are not property of the Russian state. But global military support for Ukraine has declined sharply in 2025, and Europe has struggled to cover the deficit caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are currently two EU options seeking to providing Ukraine with €90bn, to cover two-thirds of its financial requirements. One is to raise the money on capital markets, secured against the EU budget as a surety. This is Belgium's favored solution but it requires a unanimous vote by EU leaders and that would be difficult when Hungary and Slovakia oppose funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely turned into cash. That capital is Euroclear property deposited at the European Central Bank. The EU's executive recognizes Belgium has legitimate concerns and states it is convinced it has dealt with them. The scheme is for Belgium to be protected with a guarantee applying to all the €210bn of Russian assets in the EU. If Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. In the event that Russia took legal action against Belgium itself, any ruling 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 for the foreseeable future. Heretofore they have had to vote all together every six months to renew the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "clear risk to the economic security of the union" continues. The Reasons Belgium is Remains On Board Brussels is firm it remains a committed partner of Ukraine, but sees juridical dangers in the plan and worries about being forced to deal with the fallout if things go wrong. A normally partisan political environment in this case has united behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – imagine if it would need to carry a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to arrange enough assurances for the loan itself, Belgium worries about an added risk of being vulnerable to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to grant a loan to the EU would violate EU banking regulations. "Lenders need to follow stability regulations and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do precisely that. "What is the purpose of these bank rules? It's because we want banks to be stable. And if things turn sour it would fall to Belgium to save Euroclear. That's an additional reason why it's so important for Belgium to obtain ironclad guarantees for Euroclear." EU Leaders In a Difficult Position from Every Direction There is no time to lose, state several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "the most financially feasible and politically achievable solution". "It's a matter of destiny for us," says leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do next. That's why we have to reach an agreement in a week's time". While Russia is insistent its money should not be used, there are added concerns among European figures 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 in discussions with Europe and the US on a recovery fund, but he is also mindful the US has been holding discussions with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains running out of funding to maintain its military and economy, after nearly four years of full-scale conflict with Russia. From the EU's perspective, the remedy to addressing Kyiv's financial shortfall of €135.7bn for the coming 24 months rests with assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and Brussels hope to finalize the plan at their EU leaders' conference next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia stated on Friday it was taking to court Euroclear in a Moscow court ahead of a final decision is made. 'Only Fair' to Employ Moscow's Assets, Say Kyiv and Brussels Overall, Russia has about €210bn of its funds frozen in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities maintain that those funds should be used to reconstruct what Russia has devastated: Brussels refers to it as a "reparations loan" and has devised a plan to prop up Ukraine's economy valued at €90bn. "It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that those funds then becomes ours," states Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz argues the assets will "allow Ukraine to shield itself successfully against any future Russian attacks". The legal move by Moscow was foreseen in Brussels. But it is not only Moscow that is unhappy. The Belgian government is worried it will be left with an enormous bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the world's financial order". Euroclear also has an roughly €16-17bn frozen in Russia. The leader of Belgium Bart de Wever has presented the EU with 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 "carries significant risks" for his country. Explaining the EU's Proposal? The EU is working to the wire ahead of next Thursday's summit to come up with a compromise that Belgium can support. Previously the EU has refrained from accessing the frozen capital directly but for the past year has directed the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the interest is deemed permissible as Russia is subject to sanctions and the earnings are not property of the Russian state. But global military support for Ukraine has declined sharply in 2025, and Europe has struggled to cover the deficit caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are currently two EU options seeking to providing Ukraine with €90bn, to cover two-thirds of its financial requirements. One is to raise the money on capital markets, secured against the EU budget as a surety. This is Belgium's favored solution but it requires a unanimous vote by EU leaders and that would be difficult when Hungary and Slovakia oppose funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely turned into cash. That capital is Euroclear property deposited at the European Central Bank. The EU's executive recognizes Belgium has legitimate concerns and states it is convinced it has dealt with them. The scheme is for Belgium to be protected with a guarantee applying to all the €210bn of Russian assets in the EU. If Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU. In the event that Russia took legal action against Belgium itself, any ruling 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 for the foreseeable future. Heretofore they have had to vote all together every six months to renew the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "clear risk to the economic security of the union" continues. The Reasons Belgium is Remains On Board Brussels is firm it remains a committed partner of Ukraine, but sees juridical dangers in the plan and worries about being forced to deal with the fallout if things go wrong. A normally partisan political environment in this case has united behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – imagine if it would need to carry a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to arrange enough assurances for the loan itself, Belgium worries about an added risk of being vulnerable to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to grant a loan to the EU would violate EU banking regulations. "Lenders need to follow stability regulations and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do precisely that. "What is the purpose of these bank rules? It's because we want banks to be stable. And if things turn sour it would fall to Belgium to save Euroclear. That's an additional reason why it's so important for Belgium to obtain ironclad guarantees for Euroclear." EU Leaders In a Difficult Position from Every Direction There is no time to lose, state several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "the most financially feasible and politically achievable solution". "It's a matter of destiny for us," says leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do next. That's why we have to reach an agreement in a week's time". While Russia is insistent its money should not be used, there are added concerns among European figures 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 in discussions with Europe and the US on a recovery fund, but he is also mindful the US has been holding discussions with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving