🔗 Share this article Russia Responds at Europe's Proposal to Lend Immobilized Russian Funds to Kyiv Ukraine is running out of cash to sustain its military and economy afloat, after almost four years of full-scale conflict with Russia. In the view of European leaders, the remedy to plugging Kyiv's financial shortfall of €135.7bn for the coming 24 months lies in Moscow's immobilized funds located within Belgian bank Euroclear, and EU leaders aim to sign that off at their EU leaders' conference next week. Russian officials warn the EU plan would be an act of theft, and Russia's central bank stated on Friday it was taking to court Euroclear in a Moscow court even before a definitive agreement is made. 'Appropriate' to Utilize Moscow's Funds, Say Ukraine and the EU Overall, Russia has approximately €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities argue that that capital should be used to restore what Russia has laid waste to: The European Commission refers to it as a "reconstruction loan" and has come up with a plan to support Ukraine's economy amounting to €90bn. "It's only fair that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that money then becomes ours," remarks Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "allow Ukraine to defend itself successfully against future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is concerned. Authorities in Brussels is concerned it will be burdened by an enormous bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "disrupt the global financial architecture". Euroclear also has an estimated €16-17bn locked in Russia. The leader of Belgium Bart de Wever has given Brussels a series of "rational, reasonable, and justified conditions" before he will endorse the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country. Explaining the EU's Proposal? The EU is working to the wire before next Thursday's summit to finalize a arrangement that Belgium can accept. So far the EU has refrained from accessing the frozen capital directly but starting in 2024 has transferred the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is considered less risky as Russia is under sanction and the returns are not Moscow's sovereign assets. But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to compensate for the gap caused by the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU proposals aimed at supplying Ukraine with €90bn, to cover a large portion of its budgetary necessities. Option one is to raise the money on capital markets, backed by the EU budget as a collateral. This is Belgium's first choice but it needs a consensus by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military. That leaves providing a loan of Ukraine cash from the Moscow's immobilized capital, which were initially held in bonds but have now mostly turned into cash. That funding is Euroclear property held in the European Central Bank. The EU's executive recognizes Belgium has valid worries and states it is convinced it has dealt with them. The proposal is for Belgium to be protected with a insurance encompassing all the €210bn of Russian assets in the EU. If Euroclear face a financial hit of its own assets in Russia, the shortfall would be covered 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 recognized in the EU. In a key development, EU ambassadors are poised to endorse on Friday to freeze indefinitely Russia's central bank assets held in Europe indefinitely. Previously they have had to vote all together every six months to renew the freeze, which could have meant a ongoing 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 "clear risk to the economic security of the union" continues. The Reasons Belgium is Remains Satisfied The Belgian government is insistent it remains a strong supporter of Ukraine, but sees juridical dangers in the plan and fears being forced to deal with the repercussions if things go wrong. A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is facing pressure from fellow EU leaders. "The Belgian economy is not large. Belgian GDP is approximately €565bn – imagine 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 sufficient protections for the loan itself, Belgium is concerned about an added risk of being subject to extra damages or penalties. Prof Colaert also argues the demand for Euroclear to issue credit to the EU would contravene EU banking regulations. "Banks need to adhere to prudential rules and shouldn't concentrate risk. Now the EU is instructing Euroclear to do precisely 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 a further cause why it's so vital for Belgium to obtain absolute guarantees for Euroclear." Europe Under Pressure from Every Direction There is no time to lose, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the frozen assets plan is "the most 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 next. That's why we have to succeed in a week's time". Although Russia is unyielding its money should not be touched, there are further worries among European figures that the US may want to use Russia's immobilized billions differently, as part of its own peace initiative. Zelensky has indicated Ukraine is working with Europe and the US on a recovery fund, but he is also cognizant the US has been engaging with Russia about potential collaboration. A preliminary version of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving
Ukraine is running out of cash to sustain its military and economy afloat, after almost four years of full-scale conflict with Russia. In the view of European leaders, the remedy to plugging Kyiv's financial shortfall of €135.7bn for the coming 24 months lies in Moscow's immobilized funds located within Belgian bank Euroclear, and EU leaders aim to sign that off at their EU leaders' conference next week. Russian officials warn the EU plan would be an act of theft, and Russia's central bank stated on Friday it was taking to court Euroclear in a Moscow court even before a definitive agreement is made. 'Appropriate' to Utilize Moscow's Funds, Say Ukraine and the EU Overall, Russia has approximately €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities argue that that capital should be used to restore what Russia has laid waste to: The European Commission refers to it as a "reconstruction loan" and has come up with a plan to support Ukraine's economy amounting to €90bn. "It's only fair that Russia's frozen assets should be used to reconstruct what Russia has devastated – and that money then becomes ours," remarks Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "allow Ukraine to defend itself successfully against future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is concerned. Authorities in Brussels is concerned it will be burdened by an enormous bill if it all goes wrong, and Euroclear chief executive Valérie Urbain says using the assets could "disrupt the global financial architecture". Euroclear also has an estimated €16-17bn locked in Russia. The leader of Belgium Bart de Wever has given Brussels a series of "rational, reasonable, and justified conditions" before he will endorse the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country. Explaining the EU's Proposal? The EU is working to the wire before next Thursday's summit to finalize a arrangement that Belgium can accept. So far the EU has refrained from accessing the frozen capital directly but starting in 2024 has transferred the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is considered less risky as Russia is under sanction and the returns are not Moscow's sovereign assets. But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to compensate for the gap caused by the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU proposals aimed at supplying Ukraine with €90bn, to cover a large portion of its budgetary necessities. Option one is to raise the money on capital markets, backed by the EU budget as a collateral. This is Belgium's first choice but it needs a consensus by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military. That leaves providing a loan of Ukraine cash from the Moscow's immobilized capital, which were initially held in bonds but have now mostly turned into cash. That funding is Euroclear property held in the European Central Bank. The EU's executive recognizes Belgium has valid worries and states it is convinced it has dealt with them. The proposal is for Belgium to be protected with a insurance encompassing all the €210bn of Russian assets in the EU. If Euroclear face a financial hit of its own assets in Russia, the shortfall would be covered 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 recognized in the EU. In a key development, EU ambassadors are poised to endorse on Friday to freeze indefinitely Russia's central bank assets held in Europe indefinitely. Previously they have had to vote all together every six months to renew the freeze, which could have meant a ongoing 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 "clear risk to the economic security of the union" continues. The Reasons Belgium is Remains Satisfied The Belgian government is insistent it remains a strong supporter of Ukraine, but sees juridical dangers in the plan and fears being forced to deal with the repercussions if things go wrong. A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is facing pressure from fellow EU leaders. "The Belgian economy is not large. Belgian GDP is approximately €565bn – imagine 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 sufficient protections for the loan itself, Belgium is concerned about an added risk of being subject to extra damages or penalties. Prof Colaert also argues the demand for Euroclear to issue credit to the EU would contravene EU banking regulations. "Banks need to adhere to prudential rules and shouldn't concentrate risk. Now the EU is instructing Euroclear to do precisely 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 a further cause why it's so vital for Belgium to obtain absolute guarantees for Euroclear." Europe Under Pressure from Every Direction There is no time to lose, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the frozen assets plan is "the most 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 next. That's why we have to succeed in a week's time". Although Russia is unyielding its money should not be touched, there are further worries among European figures that the US may want to use Russia's immobilized billions differently, as part of its own peace initiative. Zelensky has indicated Ukraine is working with Europe and the US on a recovery fund, but he is also cognizant the US has been engaging with Russia about potential collaboration. A preliminary version of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving