Moscow Hits Back at the EU's Plan to Lend Frozen Moscow's Cash to Kyiv

Ukraine is depleting its funding to maintain its armed forces and economy, after close to 48 months of the ongoing invasion by Moscow.

In the view of European leaders, the remedy to filling Ukraine's funding gap of €135.7bn for the following biennium is found in Moscow's immobilized funds held by Belgian bank Euroclear, and European Union officials aim to give it the green light at their EU leaders' conference next week.

Moscow's representatives caution the EU plan would be an illegal seizure, and Russia's central bank stated on Friday it was taking to court Euroclear in a Moscow court ahead of a conclusive plan is made.

'Only Fair' to Use Moscow's Assets, Say Kyiv and Brussels

All told, Russia has roughly €210bn of its assets immobilized in the EU, and €185bn of that is managed by Euroclear.

European and Ukrainian authorities maintain that those funds should be used to reconstruct what Russia has destroyed: EU officials terms it a "reconstruction loan" and has come up with 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," remarks Ukraine's Volodymyr Zelensky.

Chancellor Friedrich Merz states the assets will "help Ukraine to defend itself successfully against future Russian attacks".

The legal move by Moscow was expected in Brussels. But it is not just Moscow that is unhappy.

Belgium is concerned it will be left with an huge bill if it all goes wrong, and Euroclear head Valérie Urbain warns using the assets could "undermine the world's financial order".

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

Belgian Prime Minister Bart de Wever has set the EU a series of "logical, sensible, and warranted conditions" before he will accept the reconstruction loan scheme, and he has not excluded legal action if it "carries significant risks" for his country.

The Details of the EU's Plan?

The EU is racing against time ahead of next Thursday's summit to finalize a arrangement that Belgium can support.

So far the EU has refrained from touching the principal funds directly but for the past year has directed the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the interest is deemed safe as Russia is subject to sanctions and the returns are not Russian sovereign property.

But international military aid for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to compensate for the shortfall caused by the US decision to all but stop funding Ukraine under President Donald Trump.

There are at the moment two EU proposals aimed at providing Ukraine with €90bn, to cover a majority of its budgetary necessities.

• The first is to raise the money on the markets, backed by the EU budget as a surety. This is Belgium's favored solution but it needs a consensus by EU leaders and that would be problematic when Budapest and Bratislava oppose funding Ukraine's military.
• That leaves providing a loan of Ukraine cash from the frozen Russian funds, which were originally held in bonds but have now largely matured into cash. That funding is owned by Euroclear held in the European Central Bank.

The EU's executive acknowledges Belgium has justified fears and says it is assured it has addressed them.

The plan is for Belgium to be shielded with a assurance covering all the €210bn of Russian assets in the EU.

If Euroclear suffer a loss 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.

Should 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 freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future.

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

The EU ambassadors are expected to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "direct danger to the financial well-being of the union" continues.

Why Belgium is Remains Satisfied

Belgium is insistent it remains a committed partner of Ukraine, but identifies legal risks in the plan and fears being shouldering the consequences if things fail.

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

"The Belgian economy is not large. Belgian GDP is about €565bn – imagine 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 sufficient assurances for the loan itself, Belgium fears an additional danger of being exposed to extra fines or liabilities.

Prof Colaert also contends the requirement for Euroclear to issue credit to the EU would breach EU banking regulations.

"Lenders need to follow prudential rules and shouldn't make one enormous loan. Now the EU is asking Euroclear to do just that.

"What is the purpose of these bank rules? It's because we want banks to be secure. And if things turn sour it would become the responsibility of Belgium to save Euroclear. That's an additional reason why it's so vital for Belgium to get water-tight assurances for Euroclear."

EU Leaders In a Difficult Position from Every Direction

Time is of the essence, caution a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the financially feasible and politically realistic solution".

"This is a crucial test for us," says 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 finalize the deal in a week's time".

Although Russia is adamant its money should not be touched, there are additional apprehensions among EU officials that the US may want to deploy 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 rebuilding fund, but he is also cognizant the US has been talking to Russia about possible partnership.

A preliminary version of the US peace plan mentioned $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving