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

Kyiv remains facing a severe shortage of cash to maintain its military and economy afloat, after close to 48 months of full-scale conflict with Russia.

In the view of European leaders, the solution to plugging Kyiv's funding gap of €135.7bn for the next two years rests with Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels hope to finalize the plan at their Brussels summit next week.

Authorities in Russia caution the EU plan would be an act of theft, and Moscow's monetary authority announced on Friday it was taking to court Euroclear in a Moscow court ahead of a final decision is made.

'Appropriate' to Utilize Russia's Funds, Argue Kyiv and Brussels

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

The EU and Ukraine argue that money should be used to rebuild what Russia has destroyed: EU officials refers to it as a "reconstruction loan" and has devised a plan to prop up Ukraine's economy valued at €90bn.

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

German Chancellor Friedrich Merz states the assets will "enable Ukraine to defend itself successfully against any future Russian attacks".

Moscow's lawsuit was expected in Brussels. But it is not only Moscow that is dissatisfied.

Belgium is worried it will be left with an massive bill if it all backfires, and Euroclear CEO Valérie Urbain warns using the assets could "destabilise the global financial architecture".

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

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

The Details of the EU's Proposal?

Brussels is under pressure ahead of next Thursday's summit to finalize a arrangement that Belgium can accept.

Until now the EU has refrained from using the frozen capital directly but for the past year has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is deemed less risky as Russia is subject to sanctions and the returns are not Moscow's sovereign assets.

But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to compensate for the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are presently two EU options aimed at furnishing Ukraine with €90bn, to pay for a majority of its funding needs.

• One is to borrow the funds on financial markets, secured against the EU budget as a guarantee. This is Belgium's favored solution but it needs a agreement by all by EU leaders and that would be challenging 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 originally held in securities but have now predominantly been converted into cash. That funding is an asset of Euroclear located within the European Central Bank.

The European Commission accepts Belgium has legitimate concerns and claims it is assured it has dealt with them.

The plan is for Belgium to be shielded with a insurance encompassing all the €210bn of Russian assets in the EU.

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

In a key development, EU ambassadors are poised to endorse on Friday to permanently block Russia's central bank assets held in Europe for the foreseeable future.

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

The EU ambassadors are set to use an special provision under Article 122 of the EU Treaties so the assets stay blocked as long as an "direct danger to the economic interests of the union" continues.

The Reasons Belgium is Remains Convinced

Brussels is adamant it remains a strong supporter of Ukraine, but perceives regulatory pitfalls in the plan and is concerned about being shouldering the fallout if things fail.

A normally divided political landscape in this case has united behind Prime Minister Bart de Wever, who is under pressure from fellow EU leaders.

"Belgium is a small economy. Belgian GDP is around €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University.

While the EU might be able to secure enough guarantees for the loan itself, Belgium worries about an additional danger of being vulnerable to extra legal costs.

Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would violate EU banking regulations.

"Banks need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is telling Euroclear to do just that.

"Why do we have these bank rules? It's because we want banks to be secure. And if things go wrong it would fall to Belgium to bail out Euroclear. That's an additional reason why it's so vital for Belgium to secure water-tight guarantees for Euroclear."

The European Union Facing Strain from All Sides

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

"This is a crucial test for us," says leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do subsequently. That's why we have to finalize the deal 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 frozen billions differently, as part of its own peace initiative.

Zelensky has stated Ukraine is in discussions with Europe and the US on a recovery fund, but he is also mindful the US has been engaging with Russia about potential collaboration.

An initial document of the US peace plan referred to $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving