Moscow Responds at the EU's Plan to Lend Frozen Moscow's Assets to Ukraine

Ukraine is running out of financial resources to sustain its military and economy, after almost four years of Russia's full-scale war.

From the EU's perspective, the answer to addressing Ukraine's funding gap of €135.7bn for the following biennium is found in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and European Union officials seek to give it the green light at their Brussels summit next week.

Moscow's representatives caution the EU plan would be an illegal seizure, and Moscow's monetary authority announced on Friday it was taking to court Euroclear in a Moscow court prior to a conclusive plan is made.

'Just' to Utilize Moscow's Funds, Argue European and Ukrainian Officials

In total, Russia has roughly €210bn of its funds blocked in the EU, and €185bn of that is in the custody of Euroclear.

European and Ukrainian authorities contend that those funds should be used to rebuild what Russia has laid waste to: EU officials refers to it as a "reparations loan" and has devised a plan to support Ukraine's economy to the tune of €90bn.

"It's only fair that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that money then becomes Ukraine's," states Ukraine's Volodymyr Zelensky.

Chancellor Friedrich Merz states the assets will "allow Ukraine to defend itself effectively against subsequent Russian attacks".

Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is concerned.

Belgium is worried it will be left with an massive bill if it all backfires, and Euroclear head Valérie Urbain warns using the assets could "disrupt the international financial system".

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

Belgium's PM Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reparations plan, and he has not excluded legal action if it "carries significant risks" for his country.

What is the EU's Plan?

Brussels is racing against time prior to next Thursday's summit to finalize a solution that Belgium can accept.

Until now the EU has refrained from touching the frozen capital directly but starting in 2024 has paid the "excess income" from them to Ukraine. In 2024 that was €3.7bn. Juridically, using the profits is considered less risky as Russia is under sanction and the returns are not Moscow's sovereign assets.

But global military support for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to cover the gap left by the US decision to virtually halt funding Ukraine under President Donald Trump.

There are currently two EU options aimed at providing Ukraine with €90bn, to finance a large portion of its funding needs.

• The first is to secure the capital on the markets, guaranteed 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 challenging when Hungary and Slovakia oppose funding Ukraine's military.
• That leaves lending Ukraine cash from the Moscow's immobilized capital, which were originally held in financial instruments but have now largely turned into cash. That money is an asset of Euroclear located within the European Central Bank.

Brussels' executive arm recognizes Belgium has valid worries and claims it is confident it has dealt with them.

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

If Euroclear face a financial hit of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own settlement agency which are in the EU.

Should Russia targeted Belgium itself, any judgment by a Russian court would not be recognized in the EU.

In a key development, EU ambassadors are expected to agree on Friday to freeze indefinitely Russia's central bank assets held in Europe permanently.

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

The EU ambassadors are planning to use an emergency clause under Article 122 of the EU Treaties so the assets stay blocked as long as an "direct danger to the economic security of the union" continues.

Why Belgium is Remains Satisfied

The Belgian government is adamant it remains a committed partner of Ukraine, but perceives juridical dangers in the plan and is concerned about being left to handle the consequences if things do not work out.

A normally fractured political scene in this case has united behind Prime Minister Bart de Wever, who is facing pressure from European colleagues.

"The Belgian economy is not large. Belgian GDP is approximately €565bn – imagine if it would need to bear a €185bn bill," says Veerle Colaert, professor of financial law at KU Leuven University.

Although the EU might be able to arrange enough assurances for the loan itself, Belgium fears an added risk of being exposed to extra fines or liabilities.

Prof Colaert also believes the requirement for Euroclear to issue credit to the EU would violate EU banking regulations.

"Lenders need to comply with capital and liquidity requirements and shouldn't put all their eggs in one basket. Now the EU is telling Euroclear to do exactly that.

"What is the purpose of these banking laws? It's because we want banks to be solvent. And if things turn sour it would become the responsibility of Belgium to bail out Euroclear. That's an additional reason why it's so vital for Belgium to get water-tight protections for Euroclear."

EU Leaders Under Pressure from Multiple Fronts

The situation is urgent, state a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They argue the proposal to use Russian funds is "the fiscally viable and practically possible solution".

"This is a crucial test for us," warns 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 finalize the deal in a week's time".

While Russia is unyielding its money should not be used, there are additional apprehensions among leaders in Europe that the US may want to use Russia's blocked funds for another purpose, as part of its own peace initiative.

Zelensky has stated Ukraine is in discussions with Europe and the US on a rebuilding fund, but he is also cognizant the US has been talking to Russia about possible partnership.

An early draft of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving