Moscow Responds at Europe's Proposal to Loan Immobilized Moscow's Funds to Ukraine

Kyiv remains depleting its financial resources to sustain its military and economy afloat, after almost four years of full-scale conflict with Russia.

For Europe, the remedy to filling Ukraine's budget hole of €135.7bn for the coming 24 months lies in Moscow's immobilized funds held by Belgian bank Euroclear, and Brussels seek to give it the green light at their EU leaders' conference next week.

Authorities in Russia warn the EU plan would be an confiscation, and Russia's central bank stated on Friday it was taking to court Euroclear in a Moscow court ahead of a conclusive plan is made.

'Appropriate' to Utilize Moscow's Funds, Say Kyiv and Brussels

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

The EU and Ukraine contend that that capital should be used to restore what Russia has destroyed: Brussels refers to it as a "loan for reparations" and has devised a plan to prop up Ukraine's economy valued at €90bn.

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

Chancellor Friedrich Merz says the assets will "enable Ukraine to shield itself efficiently against future Russian attacks".

Moscow's lawsuit was foreseen in Brussels. But it is not only Moscow that is concerned.

Belgium is concerned it will be saddled with an huge bill if it all goes wrong, and Euroclear head Valérie Urbain warns using the assets could "disrupt the world's financial order".

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

Belgium's PM Bart de Wever has given Brussels a series of "logical, sensible, and warranted conditions" before he will agree to the reparations plan, and he has not excluded legal action if it "carries significant risks" for his country.

Explaining the EU's Proposal?

European Union officials is under pressure before next Thursday's summit to finalize a arrangement that Belgium can accept.

Previously the EU has held off touching the assets themselves directly but since last year has directed the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the interest is deemed less risky as Russia is sanctioned and the returns are not Moscow's sovereign assets.

But global military support for Ukraine has fallen significantly in 2025, and Europe has found it difficult to make up the gap left by the US decision to virtually halt funding Ukraine under President Donald Trump.

There are currently two EU options seeking to providing Ukraine with €90bn, to cover two-thirds of its budgetary necessities.

• One is to raise the money on capital markets, guaranteed by the EU budget as a guarantee. This is Belgium's preferred option but it demands a consensus by EU leaders and that would be problematic when Hungary and Slovakia are against funding Ukraine's military.
• That leaves lending Ukraine cash from the Russian assets, which were originally held in securities but have now predominantly turned into cash. That funding is an asset of Euroclear located within the European Central Bank.

The EU's executive acknowledges Belgium has legitimate concerns and says it is confident it has addressed them.

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

If Euroclear face a financial hit 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.

Should Russia targeted 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 freeze indefinitely Russia's central bank assets held in Europe for the foreseeable future.

Heretofore they have had to vote by consensus every six months to renew the freeze, which could have meant a repeated risk to Belgium.

The EU ambassadors are planning to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the economic interests of the union" continues.

The Reasons Belgium is Still Not Convinced

Brussels is firm it remains a committed partner of Ukraine, but sees regulatory pitfalls in the plan and is concerned about being shouldering the consequences if things do not work out.

A typically divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is being pressured from fellow EU leaders.

"The Belgian economy is not large. Belgian GDP is around €565bn – think about if it would need to shoulder a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

While the EU might be able to secure enough guarantees for the loan itself, Belgium fears an further exposure of being exposed to extra legal costs.

Prof Colaert also argues the requirement for Euroclear to provide a loan to the EU would breach EU banking regulations.

"Banks need to adhere to capital and liquidity requirements and shouldn't make one enormous loan. 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 secure. And if things turn sour it would be up to Belgium to save Euroclear. That's another reason why it's so crucial for Belgium to obtain absolute assurances for Euroclear."

The European Union Facing Strain from Multiple Fronts

Time is of the essence, warn a group of EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "a financially feasible and politically achievable solution".

"It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do subsequently. That's why we have to succeed in a week's time".

Although Russia is adamant its money should not be touched, there are further worries among European figures that the US may want to deploy Russia's blocked funds for another purpose, as part of its own peace plan.

Zelensky has said Ukraine is working with Europe and the US on a reconstruction 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 mentioned $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving