🔗 Share this article Moscow Retaliates at Europe's Scheme to Lend Immobilized Moscow's Cash to Kyiv Ukraine is facing a severe shortage of financial resources to keep going its military and economy afloat, after close to 48 months of full-scale conflict with Russia. For Europe, the solution to addressing Ukraine's funding gap of €135.7bn for the following biennium lies in frozen Russian assets located within Belgian bank Euroclear, and Brussels hope to sign that off at their meeting in Brussels next week. Authorities in Russia warn the EU plan would be an illegal seizure, and Russia's central bank stated on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a conclusive plan is made. 'Appropriate' to Use Moscow's Funds, Say European and Ukrainian Officials All told, Russia has roughly €210bn of its funds blocked in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that money should be used to reconstruct what Russia has destroyed: EU officials calls it a "reconstruction loan" and has proposed a plan to bolster Ukraine's economy to the tune of €90bn. "It's only fair that Moscow's blocked funds should be used to rebuild what Russia has destroyed – and that money then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz argues the assets will "enable Ukraine to defend itself efficiently against future Russian attacks". Russia's court action was expected in Brussels. But it is not only Moscow that is unhappy. Belgium is worried it will be saddled with an huge bill if it all fails, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the global financial architecture". Euroclear also has an approximate €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 endorse the reconstruction loan scheme, and he has left open the possibility of legal action if it "poses significant risks" for his country. What is the EU's Proposal? The EU is racing against time before next Thursday's summit to finalize a arrangement that Belgium can agree to. Previously the EU has refrained from accessing the assets themselves directly but for the past year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is considered permissible as Russia is sanctioned and the returns are not Russian sovereign property. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has struggled to cover the gap resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are presently two EU plans seeking to providing Ukraine with €90bn, to pay for a majority of its budgetary necessities. Option one is to borrow the funds on financial markets, secured against the EU budget as a collateral. This is Belgium's first choice but it demands a consensus by EU leaders and that would be challenging when Hungary and Slovakia oppose funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Russian assets, which were initially held in securities but have now mostly turned into cash. That funding is Euroclear property held in the European Central Bank. The EU's executive acknowledges Belgium has justified fears and claims it is convinced it has resolved them. The proposal is for Belgium to be shielded with a assurance applying to all the €210bn of Russian assets in the EU. If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU. Should Russia went after Belgium itself, any judgment by a Russian court would not be enforced in the EU. In a significant move, EU ambassadors are poised to endorse on Friday to immobilise Russia's central bank assets held in Europe indefinitely. Until now 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 set to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "clear risk to the financial well-being of the union" continues. Why Belgium is Still Not Convinced Brussels is insistent it remains a strong supporter of Ukraine, but perceives juridical dangers in the plan and worries about being left to handle the consequences if things go wrong. A normally fractured political scene in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine if it would need to bear a €185bn bill," comments Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to obtain adequate guarantees for the loan itself, Belgium is concerned about an additional danger of being subject to extra legal costs. Prof Colaert also believes the demand for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to follow prudential rules and shouldn't put all their eggs in one basket. Now the EU is asking Euroclear to do exactly that. "Why do we have these banking laws? It's because we want banks to be secure. And if things turn sour it would fall to Belgium to save Euroclear. That's another reason why it's so important for Belgium to obtain water-tight assurances for Euroclear." Europe Under Pressure from Every Direction The situation is urgent, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the most economically realistic and politically achievable solution". "It's a matter of destiny for us," states 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 succeed in a week's time". While Russia is unyielding its money should not be accessed, there are added concerns among EU officials that the US may want to employ Russia's blocked funds for another purpose, as part of its own diplomatic proposal. Zelensky has said Ukraine is working 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 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
Ukraine is facing a severe shortage of financial resources to keep going its military and economy afloat, after close to 48 months of full-scale conflict with Russia. For Europe, the solution to addressing Ukraine's funding gap of €135.7bn for the following biennium lies in frozen Russian assets located within Belgian bank Euroclear, and Brussels hope to sign that off at their meeting in Brussels next week. Authorities in Russia warn the EU plan would be an illegal seizure, and Russia's central bank stated on Friday it was initiating legal action against Euroclear in a Moscow court ahead of a conclusive plan is made. 'Appropriate' to Use Moscow's Funds, Say European and Ukrainian Officials All told, Russia has roughly €210bn of its funds blocked in the EU, and €185bn of that is managed by Euroclear. The EU and Ukraine maintain that money should be used to reconstruct what Russia has destroyed: EU officials calls it a "reconstruction loan" and has proposed a plan to bolster Ukraine's economy to the tune of €90bn. "It's only fair that Moscow's blocked funds should be used to rebuild what Russia has destroyed – and that money then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz argues the assets will "enable Ukraine to defend itself efficiently against future Russian attacks". Russia's court action was expected in Brussels. But it is not only Moscow that is unhappy. Belgium is worried it will be saddled with an huge bill if it all fails, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the global financial architecture". Euroclear also has an approximate €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 endorse the reconstruction loan scheme, and he has left open the possibility of legal action if it "poses significant risks" for his country. What is the EU's Proposal? The EU is racing against time before next Thursday's summit to finalize a arrangement that Belgium can agree to. Previously the EU has refrained from accessing the assets themselves directly but for the past year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the revenue is considered permissible as Russia is sanctioned and the returns are not Russian sovereign property. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has struggled to cover the gap resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are presently two EU plans seeking to providing Ukraine with €90bn, to pay for a majority of its budgetary necessities. Option one is to borrow the funds on financial markets, secured against the EU budget as a collateral. This is Belgium's first choice but it demands a consensus by EU leaders and that would be challenging when Hungary and Slovakia oppose funding Ukraine's military. This makes the other option providing a loan of Ukraine cash from the Russian assets, which were initially held in securities but have now mostly turned into cash. That funding is Euroclear property held in the European Central Bank. The EU's executive acknowledges Belgium has justified fears and claims it is convinced it has resolved them. The proposal is for Belgium to be shielded with a assurance applying to all the €210bn of Russian assets in the EU. If Euroclear suffer a loss of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU. Should Russia went after Belgium itself, any judgment by a Russian court would not be enforced in the EU. In a significant move, EU ambassadors are poised to endorse on Friday to immobilise Russia's central bank assets held in Europe indefinitely. Until now 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 set to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "clear risk to the financial well-being of the union" continues. Why Belgium is Still Not Convinced Brussels is insistent it remains a strong supporter of Ukraine, but perceives juridical dangers in the plan and worries about being left to handle the consequences if things go wrong. A normally fractured political scene in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine if it would need to bear a €185bn bill," comments Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to obtain adequate guarantees for the loan itself, Belgium is concerned about an additional danger of being subject to extra legal costs. Prof Colaert also believes the demand for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to follow prudential rules and shouldn't put all their eggs in one basket. Now the EU is asking Euroclear to do exactly that. "Why do we have these banking laws? It's because we want banks to be secure. And if things turn sour it would fall to Belgium to save Euroclear. That's another reason why it's so important for Belgium to obtain water-tight assurances for Euroclear." Europe Under Pressure from Every Direction The situation is urgent, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the most economically realistic and politically achievable solution". "It's a matter of destiny for us," states 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 succeed in a week's time". While Russia is unyielding its money should not be accessed, there are added concerns among EU officials that the US may want to employ Russia's blocked funds for another purpose, as part of its own diplomatic proposal. Zelensky has said Ukraine is working 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 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