Moscow Responds at Europe's Plan to Loan Immobilized Russian Assets to Ukraine

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

For Europe, the solution to filling Ukraine's financial shortfall of €135.7bn for the next two years lies in frozen Russian assets held by Belgian bank Euroclear, and EU leaders seek to finalize the plan at their EU leaders' conference next week.

Moscow's representatives state the EU plan would be an illegal seizure, and Moscow's monetary authority stated on Friday it was taking to court Euroclear in a Moscow court ahead of a definitive agreement is made.

'Appropriate' to Employ Moscow's Assets, Assert European and Ukrainian Officials

Overall, Russia has approximately €210bn of its assets frozen in the EU, and €185bn of that is in the custody of Euroclear.

European and Ukrainian authorities argue that that capital should be used to restore what Russia has laid waste to: EU officials terms it a "loan for reparations" and has proposed a plan to prop up Ukraine's economy amounting to €90bn.

"It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has devastated – and that that capital then becomes ours," says Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz says the assets will "help Ukraine to shield itself efficiently against subsequent Russian attacks".

Russia's court action was expected in Brussels. But it is not just Moscow that is unhappy.

Belgium is worried it will be left with an massive bill if it all fails, and Euroclear chief executive Valérie Urbain warns using the assets could "disrupt the international financial system".

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

Belgium's PM Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reconstruction loan scheme, and he has refused to rule out legal action if it "carries significant risks" for his country.

The Details of the EU's Proposal?

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

Until now the EU has refrained from touching the frozen capital directly but for the past year has directed the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the revenue is seen as less risky as Russia is under sanction and the proceeds are not property of the Russian state.

But international military aid for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to cover the gap caused by the US decision to largely cease funding Ukraine under President Donald Trump.

There are currently two EU proposals seeking to furnishing Ukraine with €90bn, to pay for two-thirds of its budgetary necessities.

• The first is to borrow the funds on the markets, backed by the EU budget as a collateral. This is Belgium's first choice but it needs a agreement by all by EU leaders and that would be challenging when Hungary and Slovakia object to funding Ukraine's military.
• This makes the other option providing a loan of Ukraine cash from the Moscow's immobilized capital, which were initially held in securities but have now mostly matured into cash. That money is an asset of Euroclear deposited at the European Central Bank.

Brussels' executive arm recognizes Belgium has legitimate concerns and states it is confident it has addressed them.

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

If Russia targeted Belgium itself, any decision by a Russian court would not be accepted in the EU.

As an important step, EU ambassadors are expected to agree on Friday to freeze indefinitely Russia's central bank assets held in Europe permanently.

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

The EU ambassadors are expected 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 security of the union" continues.

The Reasons Belgium is Still Not On Board

Belgium is firm it remains a strong supporter of Ukraine, but identifies juridical dangers in the plan and fears being left to handle the consequences if things go wrong.

A usually divided political landscape in this case has united behind Prime Minister Bart de Wever, who is being pressured from fellow EU leaders.

"Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine if it would need to shoulder a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University.

While the EU might be able to secure sufficient protections for the loan itself, Belgium is concerned about an added risk of being vulnerable to extra fines or liabilities.

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

"Lenders need to follow capital and liquidity requirements and shouldn't concentrate risk. Now the EU is asking Euroclear to do exactly that.

"Why do we have these banking laws? It's because we want banks to be solvent. And if things fail it would be up to Belgium to rescue Euroclear. That's a further cause why it's so vital for Belgium to secure ironclad guarantees for Euroclear."

The European Union In a Difficult Position from Multiple Fronts

There is no time to lose, warn seven EU member states including those closest to Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the fiscally viable and politically realistic solution".

"It is a decisive moment for us," warns 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 succeed in a week's time".

While Russia is insistent its money should not be touched, there are added concerns among leaders in Europe that the US may want to deploy 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 rebuilding fund, but he is also aware the US has been holding discussions with Russia about future co-operation.

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