Russia Retaliates at the EU's Proposal to Loan Immobilized Russian Assets to Ukraine

Ukraine is facing a severe shortage of cash to sustain its military and economy afloat, after close to 48 months of Russia's full-scale war.

In the view of European leaders, the solution to addressing Kyiv's budget hole of €135.7bn for the next two years is found in Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels seek to finalize the plan at their Brussels summit next week.

Russian officials caution the EU plan would be an illegal seizure, and the Central Bank of Russia announced on Friday it was taking to court Euroclear in a Moscow court prior to a final decision is made.

'Only Fair' to Use Russia's Assets, Argue European and Ukrainian Officials

All told, Russia has approximately €210bn of its funds immobilized in the EU, and €185bn of that is in the custody of Euroclear.

European and Ukrainian authorities argue that those funds should be used to rebuild what Russia has laid waste to: The European Commission refers to it as a "reconstruction loan" and has devised a plan to support Ukraine's economy amounting to €90bn.

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

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

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

Belgium is worried it will be left with an huge bill if it all backfires, and Euroclear CEO Valérie Urbain warns using the assets could "disrupt the world's financial order".

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

The leader of Belgium Bart de Wever has given Brussels a series of "rational, reasonable, and justified conditions" before he will endorse the reparations plan, and he has refused to rule out legal action if it "poses significant risks" for his country.

The Details of the EU's Plan?

The EU is under pressure prior to next Thursday's summit to finalize a arrangement that Belgium can accept.

Previously the EU has held off using the assets themselves directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that was €3.7bn. From a legal standpoint, using the interest is seen as permissible as Russia is under sanction and the returns are not Russian sovereign property.

But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has struggled to make up the gap caused by the US decision to virtually halt funding Ukraine under President Donald Trump.

There are at the moment two EU plans seeking to furnishing Ukraine with €90bn, to pay for two-thirds of its budgetary necessities.

• The first is to raise the money on financial markets, backed by the EU budget as a surety. This is Belgium's preferred option but it demands a agreement by all 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 initially held in financial instruments but have now mostly been converted into cash. That funding is an asset of Euroclear deposited at the European Central Bank.

The EU's executive acknowledges Belgium has justified fears and states it is assured it has dealt with them.

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

If Euroclear face a financial hit 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 enforced in the EU.

In a key development, EU ambassadors are poised to endorse on Friday to permanently block Russia's central bank assets held in Europe indefinitely.

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

The EU ambassadors are expected to use an special provision under Article 122 of the EU Treaties so the assets remain frozen as long as an "clear risk to the economic security of the union" continues.

Why Belgium is Remains Satisfied

The Belgian government is firm it remains a committed partner of Ukraine, but sees juridical dangers in the plan and is concerned about being left to handle the repercussions if things fail.

A usually partisan political environment in this case has united behind Prime Minister Bart de Wever, who is being pressured from other European officials.

"Belgium has a modest-sized 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 adequate protections for the loan itself, Belgium is concerned about an further exposure of being vulnerable to extra legal costs.

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

"Lenders need to comply with stability regulations and shouldn't put all their eggs in one basket. 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 stable. And if things fail it would fall to Belgium to save Euroclear. That's another reason why it's so important for Belgium to obtain water-tight protections for Euroclear."

EU Leaders Under Pressure from Multiple Fronts

There is no time to lose, state a group of EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the financially feasible and politically realistic solution".

"It's a matter of destiny for us," states leading German conservative MP Norbert Röttgen. "Should we not succeed, 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 insistent its money should not be touched, there are further worries among European figures that the US may want to use Russia's blocked funds differently, as part of its own peace plan.

Zelensky has said Ukraine is in discussions with Europe and the US on a rebuilding fund, but he is also mindful the US has been engaging with Russia about potential collaboration.

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