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

Kyiv remains facing a severe shortage of funding to maintain its armed forces and economy afloat, after close to 48 months of the ongoing invasion by Moscow.

In the view of European leaders, the answer to addressing Kyiv's funding gap of €135.7bn for the following biennium lies in Moscow's immobilized funds sitting in Belgian bank Euroclear, and European Union officials hope to give it the green light at their EU leaders' conference next week.

Authorities in Russia caution the EU plan would be an act of theft, and Russia's central bank declared on Friday it was suing Euroclear in a Moscow court even before a conclusive plan is made.

'Appropriate' to Use Moscow's Assets, Assert Ukraine and the EU

All told, Russia has approximately €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear.

Brussels and Kyiv contend that that capital should be used to reconstruct what Russia has laid waste to: EU officials terms it a "reconstruction loan" and has come up with a plan to bolster Ukraine's economy amounting to €90bn.

"It is only just that the assets frozen from Russia should be used to rebuild what Russia has destroyed – and that those funds then becomes Ukraine's," says Ukraine's Volodymyr Zelensky.

Chancellor Friedrich Merz argues the assets will "help Ukraine to shield itself effectively against future Russian attacks".

Russia's court action was anticipated in Brussels. But it is not only Moscow that is concerned.

The Belgian government is worried it will be left with an enormous bill if it all fails, and Euroclear chief executive Valérie Urbain warns using the assets could "undermine the global financial architecture".

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

Belgium's PM Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reparations plan, and he has left open the possibility of legal action if it "carries significant risks" for his country.

The Details of the EU's Strategy?

European Union officials is racing against time ahead of next Thursday's summit to finalize a arrangement that Belgium can agree to.

Previously the EU has avoided accessing the assets themselves directly but since last year has paid the "excess income" from them to Ukraine. In 2024 that was €3.7bn. Juridically, using the profits is deemed permissible as Russia is sanctioned and the earnings are not Russian sovereign property.

But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has found it difficult to cover the shortfall resulting from the US decision to all but stop funding Ukraine under President Donald Trump.

There are currently two EU plans designed to furnishing Ukraine with €90bn, to cover two-thirds of its budgetary necessities.

• The first is to raise the money on the markets, backed by the EU budget as a guarantee. This is Belgium's preferred option but it demands a unanimous vote by EU leaders and that would be difficult when two member states object to funding Ukraine's military.
• That leaves loaning Ukraine cash from the frozen Russian funds, which were at first held in bonds but have now mostly turned into cash. That money is owned by Euroclear deposited at the European Central Bank.

Brussels' executive arm recognizes Belgium has justified fears and says it is confident it has resolved them.

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

Should Euroclear face a financial hit 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.

In the event that Russia went after Belgium itself, any decision by a Russian court would not be enforced in the EU.

In a key development, EU ambassadors are expected to agree on Friday to immobilise 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 repeated risk to Belgium.

The EU ambassadors are set to use an extraordinary measure under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "immediate threat to the economic security of the union" continues.

The Reasons Belgium is Not Yet On Board

Brussels is insistent it remains a staunch ally of Ukraine, but sees regulatory pitfalls in the plan and is concerned about being shouldering the consequences if things go wrong.

A typically divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from other European officials.

"Belgium is a small economy. Belgian GDP is around €565bn – consider if it would need to bear a €185bn bill," says Veerle Colaert, expert in financial law at KU Leuven University.

While the EU might be able to obtain enough assurances for the loan itself, Belgium worries about an added risk of being vulnerable to extra fines or liabilities.

Prof Colaert also contends the requirement for Euroclear to grant a loan to the EU would violate EU banking regulations.

"Financial institutions need to adhere to prudential rules and shouldn't put all their eggs in one basket. Now the EU is telling Euroclear to do exactly that.

"Why do we have these banking laws? It's because we want banks to be solvent. And if things go wrong it would be up to Belgium to save Euroclear. That's another reason why it's so vital for Belgium to get water-tight protections for Euroclear."

The European Union Under Pressure from Multiple Fronts

The situation is urgent, caution seven EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the most economically realistic and politically achievable solution".

"It's a matter of destiny for us," warns leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do next. That's why we have to reach an agreement in a week's time".

While Russia is unyielding its money should not be used, there are added concerns among EU officials that the US may want to employ Russia's frozen billions differently, as part of its own peace plan.

Zelensky has indicated Ukraine is coordinating with Europe and the US on a recovery fund, but he is also mindful the US has been talking to Russia about future co-operation.

A preliminary version of the US peace plan referred to $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving