Moscow Responds at the EU's Plan to Lend Immobilized Moscow's Assets to Kyiv

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

From the EU's perspective, the remedy to addressing Ukraine's funding gap of €135.7bn for the coming 24 months is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and European Union officials aim to finalize the plan at their EU leaders' conference next week.

Russian officials warn the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was taking to court Euroclear in a Moscow court even before a definitive agreement is made.

'Just' to Use Russia's Funds, Assert European and Ukrainian Officials

Overall, Russia has roughly €210bn of its state reserves immobilized in the EU, and €185bn of that is managed by Euroclear.

Brussels and Kyiv contend that that capital should be used to rebuild what Russia has devastated: Brussels calls it a "reparations loan" and has proposed a plan to prop up Ukraine's economy to the tune of €90bn.

"It is only just that Moscow's blocked funds should be used to reconstruct what Russia has destroyed – and that money then becomes Ukraine's," states Ukraine's Volodymyr Zelensky.

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

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

The Belgian government is anxious it will be left with an huge bill if it all fails, and Euroclear chief executive Valérie Urbain warns using the assets could "undermine the world's financial order".

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

Belgium's PM Bart de Wever has presented the EU with a series of "logical, sensible, and warranted conditions" before he will accept the reparations plan, and he has not excluded legal action if it "carries significant risks" for his country.

Explaining the EU's Proposal?

Brussels is under pressure prior to next Thursday's summit to come up with a solution that Belgium can support.

Previously the EU has refrained from using the frozen capital directly but since last year has paid the "excess income" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the profits is considered permissible as Russia is sanctioned and the returns are not Russian sovereign property.

But foreign defense assistance for Ukraine has declined sharply in 2025, and Europe has struggled to compensate for the gap left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are presently two EU proposals aimed at providing Ukraine with €90bn, to cover a large portion of its funding needs.

• Option one is to raise the money on financial markets, guaranteed by the EU budget as a guarantee. This is Belgium's favored solution but it needs a consensus by EU leaders and that would be difficult when Hungary and Slovakia oppose funding Ukraine's military.
• That leaves lending Ukraine cash from the frozen Russian funds, which were initially held in securities but have now largely been converted into cash. That money is an asset of Euroclear held in the European Central Bank.

The European Commission acknowledges Belgium has legitimate concerns and claims it is confident it has dealt with them.

The proposal is for Belgium to be shielded with a assurance applying to 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 settlement agency which are in the EU.

In the event that Russia took legal action against 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 immobilise Russia's central bank assets held in Europe indefinitely.

Previously they have had to vote unanimously every six months to renew the freeze, which could have meant a repeated risk to Belgium.

The EU ambassadors are planning to use an extraordinary measure under Article 122 of the EU Treaties so the assets remain frozen as long as an "direct danger to the financial well-being of the union" continues.

The Reasons Belgium is Not Yet Satisfied

Brussels is firm it remains a strong supporter of Ukraine, but perceives regulatory pitfalls in the plan and fears being shouldering the fallout if things fail.

A normally fractured political scene in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from other European officials.

"The Belgian economy is not large. Belgian GDP is about €565bn – imagine if it would need to bear a €185bn bill," says Veerle Colaert, professor of financial law at KU Leuven University.

Although the EU might be able to secure adequate assurances for the loan itself, Belgium fears an added risk of being vulnerable to extra damages or penalties.

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

"Banks need to follow prudential rules and shouldn't put all their eggs in one basket. Now the EU is telling Euroclear to do precisely that.

"Why do we have these banking laws? It's because we want banks to be secure. And if things turn sour it would fall to Belgium to bail out Euroclear. That's a further cause why it's so vital for Belgium to obtain absolute guarantees for Euroclear."

The European Union Under Pressure from Multiple Fronts

The situation is urgent, caution a group of EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "a fiscally viable and practically possible solution".

"It is a decisive moment for us," states leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do subsequently. That's why we have to succeed in a week's time".

Although Russia is unyielding its money should not be accessed, there are additional apprehensions among EU officials that the US may want to use Russia's immobilized billions in another way, as part of its own diplomatic proposal.

Zelensky has stated Ukraine is in discussions with Europe and the US on a recovery 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 blocked funds being used by the US for reconstruction, with the US {taking|receiving