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

Kyiv remains depleting its cash to keep going its military and economy afloat, after almost four years of full-scale conflict with Russia.

In the view of European leaders, the answer to filling Kyiv's funding gap of €135.7bn for the coming 24 months is found in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and EU leaders hope to give it the green light at their meeting in Brussels next week.

Moscow's representatives state the EU plan would be an act of theft, and Russia's central bank declared on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a definitive agreement is made.

'Just' to Employ Russia's Assets, Say Kyiv and Brussels

Overall, Russia has about €210bn of its assets immobilized in the EU, and €185bn of that is held by Euroclear.

The EU and Ukraine contend that those funds should be used to restore what Russia has destroyed: The European Commission refers to it as a "loan for reparations" and has come up with a plan to prop up Ukraine's economy amounting to €90bn.

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

Germany's leader Friedrich Merz argues the assets will "enable Ukraine to protect itself efficiently against subsequent Russian attacks".

Moscow's lawsuit was expected in Brussels. But it is not just Moscow that is unhappy.

Belgium is anxious it will be left with an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the world's financial order".

Euroclear also has an roughly €16-17bn locked in Russia.

Belgian Prime Minister Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will agree to the reconstruction loan scheme, and he has left open the possibility of legal action if it "presents significant risks" for his country.

The Details of the EU's Plan?

European Union officials is racing against time prior to next Thursday's summit to finalize a compromise that Belgium can accept.

Previously the EU has held off touching the assets themselves directly but starting in 2024 has directed the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is considered less risky as Russia is under sanction and the earnings are not Russian sovereign property.

But international military aid for Ukraine has slipped dramatically in 2025, and Europe has struggled to make up the shortfall left by the US decision to all but stop funding Ukraine under President Donald Trump.

There are presently two EU plans seeking to providing Ukraine with €90bn, to finance a large portion of its financial requirements.

• The first is to raise the money on financial markets, guaranteed by the EU budget as a guarantee. This is Belgium's first choice but it demands a agreement by all by EU leaders and that would be problematic when Budapest and Bratislava are against funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely matured into cash. That money is Euroclear property held in the European Central Bank.

The EU's executive acknowledges Belgium has legitimate concerns and states it is convinced it has addressed them.

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

Should 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.

In the event that Russia targeted Belgium itself, any ruling by a Russian court would not be recognized in the EU.

In a significant move, EU ambassadors are set to approve on Friday to permanently block Russia's central bank assets held in Europe indefinitely.

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

The EU ambassadors are set 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 interests of the union" continues.

The Reasons Belgium is Still Not Convinced

Brussels is insistent it remains a strong supporter of Ukraine, but identifies regulatory pitfalls in the plan and fears being forced to deal with the consequences if things go wrong.

A normally partisan political environment in this case has united behind Prime Minister Bart de Wever, who is under pressure from other European officials.

"The Belgian economy is not large. Belgian GDP is approximately €565bn – imagine if it would need to shoulder a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

Although the EU might be able to arrange sufficient guarantees for the loan itself, Belgium fears an further exposure of being exposed 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.

"Lenders need to adhere to stability regulations and shouldn't put all their eggs in one basket. Now the EU is telling Euroclear to do just that.

"Why do we have these banking laws? It's because we want banks to be stable. And if things fail it would become the responsibility of Belgium to bail out Euroclear. That's an additional reason why it's so crucial for Belgium to obtain ironclad protections for Euroclear."

Europe Under Pressure from Every Direction

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

"It's a matter of destiny for us," says leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do subsequently. That's why we have to reach an agreement in a week's time".

While Russia is adamant its money should not be accessed, there are added concerns among European figures that the US may want to deploy Russia's frozen billions for another purpose, as part of its own diplomatic proposal.

Zelensky has said Ukraine is coordinating with Europe and the US on a recovery 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