Moscow Hits Back at Europe's Proposal to Lend Immobilized Moscow's Assets to Kyiv

Kyiv remains depleting its financial resources to sustain its armed forces and economy, after almost four years of Russia's full-scale war.

From the EU's perspective, the remedy to addressing Ukraine's funding gap of €135.7bn for the next two years lies in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and European Union officials aim to sign that off at their Brussels summit next week.

Moscow's representatives warn the EU plan would be an illegal seizure, and Moscow's monetary authority declared on Friday it was suing Euroclear in a Moscow court even before a final decision is made.

'Just' to Utilize Russia's Assets, Assert Kyiv and Brussels

Overall, Russia has roughly €210bn of its state reserves blocked in the EU, and €185bn of that is managed by Euroclear.

The EU and Ukraine argue that that capital should be used to reconstruct what Russia has destroyed: The European Commission calls it a "reparations loan" and has devised a plan to support Ukraine's economy amounting to €90bn.

"It is only just that Russia's frozen assets should be used to rebuild what Russia has devastated – and that money then becomes Ukraine's," says Ukrainian President Volodymyr Zelensky.

German Chancellor Friedrich Merz states the assets will "allow Ukraine to shield itself successfully against any future Russian attacks".

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

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

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

The leader of Belgium Bart de Wever has presented the EU with 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.

The Details of the EU's Proposal?

Brussels is racing against time ahead of next Thursday's summit to finalize a compromise that Belgium can agree to.

Previously the EU has refrained from using 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 considered less risky as Russia is subject to sanctions and the earnings are not property of the Russian state.

But international military aid for Ukraine has declined sharply in 2025, and Europe has found it difficult to compensate for the gap caused by the US decision to all but stop funding Ukraine under President Donald Trump.

There are at the moment two EU proposals designed to supplying Ukraine with €90bn, to finance a large portion of its financial requirements.

• The first is to raise the money on the markets, backed by the EU budget as a surety. This is Belgium's preferred option but it needs a consensus by EU leaders and that would be problematic when Hungary and Slovakia object to funding Ukraine's military.
• That leaves loaning Ukraine cash from the Russian assets, which were originally held in securities but have now predominantly turned into cash. That capital is owned by Euroclear located within the European Central Bank.

The European Commission accepts Belgium has valid worries and states it is convinced it has dealt with them.

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

Should Euroclear incur losses of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU.

In the event that Russia targeted Belgium itself, any ruling by a Russian court would not be recognized in the EU.

In a key development, EU ambassadors are set to approve on Friday to immobilise Russia's central bank assets held in Europe permanently.

Until now 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 expected to use an emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an "clear risk to the economic interests of the union" continues.

The Reasons Belgium is Not Yet Satisfied

Brussels is insistent it remains a committed partner of Ukraine, but sees legal risks in the plan and worries about being left to handle the consequences if things fail.

A usually partisan political environment in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from fellow EU leaders.

"Belgium has a modest-sized economy. Belgian GDP is about €565bn – imagine if it would need to bear a €185bn bill," comments Veerle Colaert, academic specializing in financial regulation at KU Leuven University.

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

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

"Financial institutions need to comply with stability regulations and shouldn't make one enormous loan. Now the EU is asking Euroclear to do precisely that.

"Why do we have these banking laws? It's because we want banks to be secure. And if things fail it would fall to Belgium to bail out Euroclear. That's a further cause why it's so crucial for Belgium to obtain water-tight assurances for Euroclear."

Europe Facing Strain from Multiple Fronts

There is no time to lose, warn several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "a fiscally viable and practically possible solution".

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

Although Russia is adamant its money should not be touched, there are added concerns among EU officials that the US may want to deploy Russia's frozen billions differently, as part of its own peace initiative.

Zelensky has said Ukraine is in discussions with Europe and the US on a recovery fund, but he is also aware the US has been holding discussions with Russia about possible partnership.

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