Russia Responds at the EU's Scheme to Loan Immobilized Moscow's Cash to Ukraine

Ukraine is depleting its cash to sustain its armed forces and economy, after almost four years of the ongoing invasion by Moscow.

For Europe, the answer to addressing Ukraine's funding gap of €135.7bn for the next two years rests with frozen Russian assets sitting in Belgian bank Euroclear, and European Union officials hope to sign that off at their EU leaders' conference next week.

Authorities in Russia state the EU plan would be an act of theft, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a conclusive plan is made.

'Only Fair' to Use Russia's Assets, Argue European and Ukrainian Officials

In total, Russia has about €210bn of its state reserves blocked in the EU, and €185bn of that is in the custody of Euroclear.

The EU and Ukraine argue that money should be used to reconstruct what Russia has destroyed: The European Commission terms it a "reparations loan" and has proposed a plan to support Ukraine's economy valued at €90bn.

"It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that that capital then becomes Ukraine's," states Ukraine's Volodymyr Zelensky.

German Chancellor Friedrich Merz states the assets will "allow Ukraine to protect itself successfully against future Russian attacks".

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

Authorities in Brussels is anxious it will be left with an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "destabilise the international financial system".

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

Belgian Prime Minister Bart de Wever has given Brussels 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 "presents significant risks" for his country.

What is the EU's Strategy?

European Union officials is racing against time before next Thursday's summit to come up with a solution that Belgium can support.

Until now the EU has held off touching the frozen capital directly but starting in 2024 has paid the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the revenue is considered safe as Russia is under sanction and the earnings are not Moscow's sovereign assets.

But international military aid for Ukraine has declined sharply in 2025, and Europe has struggled to compensate for the shortfall resulting from the US decision to virtually halt funding Ukraine under President Donald Trump.

There are at the moment two EU proposals seeking to furnishing Ukraine with €90bn, to cover two-thirds of its budgetary necessities.

• The first is to secure the capital on the markets, guaranteed by the EU budget as a surety. This is Belgium's first choice but it demands a consensus by EU leaders and that would be problematic when Hungary and Slovakia oppose funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the frozen Russian funds, which were at first held in financial instruments but have now largely 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 convinced it has resolved them.

The plan is for Belgium to be shielded with a assurance encompassing 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.

Should Russia took legal action against Belgium itself, any judgment by a Russian court would not be enforced in the EU.

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

Previously 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 expected 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 interests of the union" continues.

Why Belgium is Not Yet Convinced

Belgium is adamant it remains a staunch ally of Ukraine, but sees juridical dangers in the plan and is concerned about being left to handle the consequences if things do not work out.

A typically divided political landscape 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 approximately €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, expert in financial law at KU Leuven University.

While the EU might be able to obtain enough protections for the loan itself, Belgium worries about an further exposure of being vulnerable to extra fines or liabilities.

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

"Financial institutions need to comply with prudential rules and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do exactly that.

"What is the purpose of these financial regulations? It's because we want banks to be solvent. And if things fail it would be up to Belgium to bail out Euroclear. That's another reason why it's so important for Belgium to obtain absolute protections for Euroclear."

EU Leaders Facing Strain from Multiple Fronts

The situation is urgent, caution several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the frozen assets plan is "the financially feasible and politically achievable solution".

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

Although Russia is insistent its money should not be accessed, there are additional apprehensions among European figures that the US may want to deploy Russia's immobilized billions in another way, as part of its own peace plan.

Zelensky has indicated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also aware the US has been holding discussions with Russia about potential collaboration.

An initial document of the US peace plan suggested $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving