🔗 Share this article Moscow Responds at the EU's Proposal to Loan Frozen Russian Funds to Ukraine Ukraine is running out of cash to maintain its armed forces and economy afloat, after nearly four years of the ongoing invasion by Moscow. In the view of European leaders, the solution to plugging Kyiv's financial shortfall of €135.7bn for the next two years is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels aim to finalize the plan 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 suing Euroclear in a Moscow court even before a conclusive plan is made. 'Just' to Use Moscow's Funds, Say Ukraine and the EU Overall, Russia has roughly €210bn of its state reserves blocked in the EU, and €185bn of that is in the custody of Euroclear. The EU and Ukraine contend that money should be used to reconstruct what Russia has devastated: EU officials terms it a "reconstruction loan" and has proposed a plan to support Ukraine's economy valued at €90bn. "It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that money then becomes ours," states Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz says the assets will "allow Ukraine to protect itself successfully against any future Russian attacks". Russia's court action was anticipated in Brussels. But it is not just Moscow that is unhappy. Belgium is anxious it will be left with an massive bill if it all fails, and Euroclear head Valérie Urbain warns using the assets could "undermine the international financial system". Euroclear also has an approximate €16-17bn locked in Russia. The leader of Belgium Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has not excluded legal action if it "poses significant risks" for his country. What is the EU's Strategy? Brussels is racing against time ahead of next Thursday's summit to agree on a compromise that Belgium can accept. So far the EU has held off accessing the frozen capital directly but starting in 2024 has directed the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is considered less risky as Russia is subject to sanctions and the returns are not Russian sovereign property. But international military aid for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to cover the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU options seeking to supplying Ukraine with €90bn, to cover two-thirds of its funding needs. One is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's first choice but it demands a consensus by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military. The alternative is loaning Ukraine cash from the Russian assets, which were initially held in bonds but have now predominantly turned into cash. That money is an asset of Euroclear located within the European Central Bank. The European Commission accepts Belgium has legitimate concerns and states it is convinced it has resolved them. The proposal is for Belgium to be protected with a assurance encompassing all the €210bn of Russian assets in the EU. If Euroclear incur losses 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. If Russia took legal action against Belgium itself, any decision by a Russian court would not be recognized in the EU. As an important step, EU ambassadors are set to approve on Friday to immobilise Russia's central bank assets held in Europe indefinitely. Previously they have had to vote all together every six months to continue the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "clear risk to the economic security of the union" continues. The Reasons Belgium is Remains Convinced Brussels is firm it remains a strong supporter of Ukraine, but perceives juridical dangers in the plan and fears being forced to deal with the fallout if things fail. A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – think about if it would need to carry a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. Although the EU might be able to secure sufficient protections for the loan itself, Belgium fears an additional danger of being exposed to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would breach EU banking regulations. "Financial institutions need to comply with prudential rules and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do precisely that. "What is the purpose of these banking laws? It's because we want banks to be secure. And if things fail it would be up to Belgium to bail out Euroclear. That's a further cause why it's so vital for Belgium to secure ironclad protections for Euroclear." The European Union Under Pressure from Every Direction The situation is urgent, caution a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a economically realistic and politically achievable 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 succeed in a week's time". While Russia is unyielding its money should not be touched, there are additional apprehensions among European figures that the US may want to use Russia's frozen billions for another purpose, as part of its own peace initiative. Zelensky has stated Ukraine is in discussions with Europe and the US on a reconstruction fund, but he is also aware the US has been holding discussions with Russia about possible partnership. An initial document 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 maintain its armed forces and economy afloat, after nearly four years of the ongoing invasion by Moscow. In the view of European leaders, the solution to plugging Kyiv's financial shortfall of €135.7bn for the next two years is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels aim to finalize the plan 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 suing Euroclear in a Moscow court even before a conclusive plan is made. 'Just' to Use Moscow's Funds, Say Ukraine and the EU Overall, Russia has roughly €210bn of its state reserves blocked in the EU, and €185bn of that is in the custody of Euroclear. The EU and Ukraine contend that money should be used to reconstruct what Russia has devastated: EU officials terms it a "reconstruction loan" and has proposed a plan to support Ukraine's economy valued at €90bn. "It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that money then becomes ours," states Ukrainian President Volodymyr Zelensky. Germany's leader Friedrich Merz says the assets will "allow Ukraine to protect itself successfully against any future Russian attacks". Russia's court action was anticipated in Brussels. But it is not just Moscow that is unhappy. Belgium is anxious it will be left with an massive bill if it all fails, and Euroclear head Valérie Urbain warns using the assets could "undermine the international financial system". Euroclear also has an approximate €16-17bn locked in Russia. The leader of Belgium Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will accept the reparations plan, and he has not excluded legal action if it "poses significant risks" for his country. What is the EU's Strategy? Brussels is racing against time ahead of next Thursday's summit to agree on a compromise that Belgium can accept. So far the EU has held off accessing the frozen capital directly but starting in 2024 has directed the "extraordinary revenues" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the profits is considered less risky as Russia is subject to sanctions and the returns are not Russian sovereign property. But international military aid for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to cover the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU options seeking to supplying Ukraine with €90bn, to cover two-thirds of its funding needs. One is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's first choice but it demands a consensus by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military. The alternative is loaning Ukraine cash from the Russian assets, which were initially held in bonds but have now predominantly turned into cash. That money is an asset of Euroclear located within the European Central Bank. The European Commission accepts Belgium has legitimate concerns and states it is convinced it has resolved them. The proposal is for Belgium to be protected with a assurance encompassing all the €210bn of Russian assets in the EU. If Euroclear incur losses 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. If Russia took legal action against Belgium itself, any decision by a Russian court would not be recognized in the EU. As an important step, EU ambassadors are set to approve on Friday to immobilise Russia's central bank assets held in Europe indefinitely. Previously they have had to vote all together every six months to continue the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "clear risk to the economic security of the union" continues. The Reasons Belgium is Remains Convinced Brussels is firm it remains a strong supporter of Ukraine, but perceives juridical dangers in the plan and fears being forced to deal with the fallout if things fail. A normally partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is about €565bn – think about if it would need to carry a €185bn bill," says Veerle Colaert, academic specializing in financial regulation at KU Leuven University. Although the EU might be able to secure sufficient protections for the loan itself, Belgium fears an additional danger of being exposed to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would breach EU banking regulations. "Financial institutions need to comply with prudential rules and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do precisely that. "What is the purpose of these banking laws? It's because we want banks to be secure. And if things fail it would be up to Belgium to bail out Euroclear. That's a further cause why it's so vital for Belgium to secure ironclad protections for Euroclear." The European Union Under Pressure from Every Direction The situation is urgent, caution a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a economically realistic and politically achievable 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 succeed in a week's time". While Russia is unyielding its money should not be touched, there are additional apprehensions among European figures that the US may want to use Russia's frozen billions for another purpose, as part of its own peace initiative. Zelensky has stated Ukraine is in discussions with Europe and the US on a reconstruction fund, but he is also aware the US has been holding discussions with Russia about possible partnership. An initial document of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving