Moscow Responds at Europe's Plan to Lend Immobilized Moscow's Cash to Kyiv

Ukraine is running out of cash to sustain its military and economy afloat, after nearly four years of the ongoing invasion by Moscow.

For Europe, the remedy to plugging Kyiv's funding gap of €135.7bn for the next two years rests with Moscow's immobilized funds located within Belgian bank Euroclear, and Brussels hope to give it the green light at their Brussels summit next week.

Authorities in Russia warn the EU plan would be an act of theft, and Russia's central bank announced on Friday it was taking to court Euroclear in a Moscow court prior to a final decision is made.

'Only Fair' to Use Moscow's Assets, Argue Ukraine and the EU

All told, Russia has roughly €210bn of its funds frozen in the EU, and €185bn of that is held by Euroclear.

Brussels and Kyiv argue that money should be used to restore what Russia has devastated: EU officials refers to it as a "reparations loan" and has proposed a plan to bolster Ukraine's economy to the tune of €90bn.

"It's only fair that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that money then becomes ours," states Ukrainian President Volodymyr Zelensky.

Germany's leader Friedrich Merz says the assets will "help Ukraine to protect itself effectively against any future Russian attacks".

The legal move by Moscow was foreseen in Brussels. But it is not only Moscow that is unhappy.

Authorities in Brussels is anxious it will be burdened by an massive bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "destabilise the world's financial order".

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

The leader of Belgium Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reconstruction loan scheme, and he has not excluded legal action if it "poses significant risks" for his country.

Explaining the EU's Plan?

The EU is working to the wire ahead of next Thursday's summit to finalize a arrangement that Belgium can accept.

So far the EU has refrained from accessing the principal funds directly but for the past year has directed the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is considered less risky as Russia is subject to sanctions and the proceeds are not property of the Russian state.

But global military support for Ukraine has fallen significantly in 2025, and Europe has struggled to make up the deficit caused by the US decision to virtually halt funding Ukraine under President Donald Trump.

There are at the moment two EU options seeking to supplying Ukraine with €90bn, to cover two-thirds of its budgetary necessities.

• The first is to raise the money on the markets, guaranteed by the EU budget as a guarantee. This is Belgium's favored solution but it needs a agreement by all by EU leaders and that would be challenging when two member states object to funding Ukraine's military.
• That leaves loaning Ukraine cash from the Moscow's immobilized capital, which were at first held in financial instruments but have now mostly matured into cash. That money is owned by Euroclear deposited at the European Central Bank.

The European Commission acknowledges Belgium has legitimate concerns and says it is convinced it has addressed them.

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

Should Euroclear suffer a loss 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 judgment by a Russian court would not be enforced in the EU.

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

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

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

The Reasons Belgium is Remains Satisfied

The Belgian government is insistent it remains a strong supporter of Ukraine, but identifies legal risks in the plan and fears being shouldering the repercussions if things do not work out.

A normally divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from fellow EU leaders.

"Belgium has a modest-sized economy. Belgian GDP is around €565bn – consider if it would need to bear a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University.

While the EU might be able to obtain sufficient assurances for the loan itself, Belgium is concerned about an additional danger of being vulnerable to extra damages or penalties.

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

"Financial institutions need to comply with capital and liquidity requirements and shouldn't make one enormous loan. Now the EU is asking Euroclear to do just that.

"Why do we have these bank rules? It's because we want banks to be stable. And if things fail it would become the responsibility of Belgium to bail out Euroclear. That's a further cause why it's so vital for Belgium to secure ironclad assurances for Euroclear."

Europe Under Pressure from Multiple Fronts

There is no time to lose, warn a group of EU member states including those bordering Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "a economically realistic and politically achievable solution".

"It is a decisive moment for us," warns 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 reach an agreement in a week's time".

Although Russia is insistent its money should not be accessed, there are added concerns among EU officials that the US may want to deploy Russia's blocked funds in another way, as part of its own peace initiative.

Zelensky has indicated Ukraine is working with Europe and the US on a recovery fund, but he is also aware the US has been engaging with Russia about potential collaboration.

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