Russia Responds at the EU's Plan to Lend Frozen Moscow's Assets to Ukraine

Ukraine is running out of financial resources to keep going its armed forces and economy afloat, after almost four years of full-scale conflict with Russia.

In the view of European leaders, the answer to addressing Ukraine's financial shortfall of €135.7bn for the coming 24 months is found in Moscow's immobilized funds held by Belgian bank Euroclear, and EU leaders seek to sign that off at their Brussels summit next week.

Russian officials warn the EU plan would be an confiscation, and Moscow's monetary authority announced on Friday it was initiating legal action against Euroclear in a Moscow court prior to a final decision is made.

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

In total, Russia has roughly €210bn of its assets immobilized in the EU, and €185bn of that is in the custody of Euroclear.

European and Ukrainian authorities contend that that capital should be used to reconstruct what Russia has devastated: The European Commission terms it a "reparations loan" and has proposed a plan to support Ukraine's economy amounting to €90bn.

"It is only just that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that that capital then becomes Ukraine's," says Ukrainian President Volodymyr Zelensky.

German Chancellor Friedrich Merz argues the assets will "allow Ukraine to protect itself effectively against subsequent Russian attacks".

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

Authorities in Brussels is worried it will be saddled with an huge bill if it all backfires, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the global financial architecture".

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

Belgian Prime Minister 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 refused to rule out legal action if it "carries significant risks" for his country.

The Details of the EU's Plan?

Brussels is under pressure before next Thursday's summit to agree on a compromise that Belgium can accept.

Previously the EU has refrained from touching the frozen capital directly but for the past year has paid the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. Juridically, using the interest is considered safe as Russia is under sanction and the returns are not Moscow's sovereign assets.

But international military aid for Ukraine has declined sharply in 2025, and Europe has struggled to make up the gap left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are at the moment two EU options seeking to furnishing Ukraine with €90bn, to finance a large portion of its funding needs.

• The first is to secure the capital on the markets, guaranteed by the EU budget as a collateral. This is Belgium's favored solution but it demands a agreement by all by EU leaders and that would be difficult when two member states oppose funding Ukraine's military.
• That leaves lending Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely matured into cash. That funding is owned by Euroclear deposited at the European Central Bank.

The European Commission acknowledges Belgium has legitimate concerns and claims it is assured it has resolved them.

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

Should 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.

If Russia went after Belgium itself, any ruling by a Russian court would not be recognized 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 indefinitely.

Heretofore they have had to vote by consensus 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 stay blocked as long as an "immediate threat to the economic security of the union" continues.

Why Belgium is Still Not Satisfied

The Belgian government is adamant it remains a staunch ally of Ukraine, but perceives legal risks in the plan and is concerned about being forced to deal with the repercussions if things go wrong.

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

"Belgium is a small economy. Belgian GDP is around €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 secure enough protections for the loan itself, Belgium fears an further exposure of being subject to extra legal costs.

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

"Lenders need to adhere to stability regulations and shouldn't make one enormous loan. Now the EU is telling Euroclear to do exactly that.

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

The European Union In a Difficult Position from Every Direction

The situation is urgent, state seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "a financially feasible and politically achievable solution".

"It is a decisive moment for us," says leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do afterwards. That's why we have to finalize the deal in a week's time".

While Russia is insistent its money should not be used, there are additional apprehensions 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 cognizant the US has been holding discussions with Russia about possible partnership.

An early draft of the US peace plan referred to $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving