🔗 Share this article Moscow Hits Back at the EU's Scheme to Lend Immobilized Moscow's Cash to Kyiv Ukraine is facing a severe shortage of cash to sustain its armed forces and economy, after nearly four years of the ongoing invasion by Moscow. From the EU's perspective, the remedy to addressing Kyiv's budget hole of €135.7bn for the next two years rests with frozen Russian assets held by Belgian bank Euroclear, and European Union officials aim to finalize the plan at their Brussels summit next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was taking to court Euroclear in a Moscow court ahead of a definitive agreement is made. 'Appropriate' to Employ Moscow's Assets, Argue Kyiv and Brussels Overall, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities maintain that those funds should be used to reconstruct what Russia has destroyed: Brussels terms it a "reconstruction loan" and has devised a plan to prop up 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 Ukraine's," remarks Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz states the assets will "enable Ukraine to protect itself successfully against subsequent Russian attacks". The legal move by Moscow was anticipated in Brussels. But it is not just Moscow that is concerned. Authorities in Brussels is worried it will be saddled with an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the global financial architecture". Euroclear also has an roughly €16-17bn locked in Russia. Belgian Prime Minister 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 left open the possibility of legal action if it "presents significant risks" for his country. Explaining the EU's Proposal? The EU is racing against time ahead of next Thursday's summit to finalize a arrangement that Belgium can support. Previously the EU has refrained from accessing the frozen capital directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the profits is deemed safe as Russia is under sanction and the returns are not Moscow's sovereign assets. But international military aid for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to cover the deficit caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are presently two EU options designed to furnishing Ukraine with €90bn, to pay for a large portion of its financial requirements. The first is to raise the money on the markets, guaranteed by the EU budget as a collateral. This is Belgium's first choice but it demands a consensus by EU leaders and that would be difficult when Budapest and Bratislava oppose funding Ukraine's military. That leaves providing a loan of Ukraine cash from the Russian assets, which were originally held in bonds but have now predominantly turned into cash. That money is Euroclear property located within the European Central Bank. The European Commission accepts Belgium has justified fears and states it is confident it has addressed them. The scheme is for Belgium to be shielded with a assurance applying to all the €210bn of Russian assets in the EU. Should Euroclear incur losses of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own settlement agency which are in the EU. If Russia targeted Belgium itself, any ruling by a Russian court would not be recognized in the EU. As an important step, EU ambassadors are set to approve on Friday to freeze indefinitely Russia's central bank assets held in Europe permanently. Heretofore 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 emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an "immediate threat to the economic interests of the union" continues. Why Belgium is Not Yet Convinced The Belgian government is firm it remains a strong supporter of Ukraine, but perceives regulatory pitfalls in the plan and is concerned about being forced to deal with the consequences if things go wrong. A typically partisan political environment in this case has united behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "The Belgian economy is not large. Belgian GDP is around €565bn – think about if it would need to carry a €185bn bill," says Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to secure enough guarantees for the loan itself, Belgium is concerned about an added risk of being subject to extra fines or liabilities. Prof Colaert also argues the requirement for Euroclear to issue credit to the EU would violate EU banking regulations. "Lenders need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is instructing Euroclear to do just that. "What is the purpose of these bank rules? It's because we want banks to be stable. And if things turn sour it would be up to Belgium to bail out Euroclear. That's another reason why it's so crucial for Belgium to secure absolute assurances for Euroclear." The European Union In a Difficult Position from Multiple Fronts There is no time to lose, warn a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "the financially feasible and politically realistic solution". "It is a decisive moment for us," says leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do afterwards. 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 leaders in Europe that the US may want to deploy Russia's frozen billions for another purpose, as part of its own peace plan. Zelensky has indicated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also aware the US has been engaging with Russia about possible partnership. An initial document 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
Ukraine is facing a severe shortage of cash to sustain its armed forces and economy, after nearly four years of the ongoing invasion by Moscow. From the EU's perspective, the remedy to addressing Kyiv's budget hole of €135.7bn for the next two years rests with frozen Russian assets held by Belgian bank Euroclear, and European Union officials aim to finalize the plan at their Brussels summit next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was taking to court Euroclear in a Moscow court ahead of a definitive agreement is made. 'Appropriate' to Employ Moscow's Assets, Argue Kyiv and Brussels Overall, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities maintain that those funds should be used to reconstruct what Russia has destroyed: Brussels terms it a "reconstruction loan" and has devised a plan to prop up 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 Ukraine's," remarks Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz states the assets will "enable Ukraine to protect itself successfully against subsequent Russian attacks". The legal move by Moscow was anticipated in Brussels. But it is not just Moscow that is concerned. Authorities in Brussels is worried it will be saddled with an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain says using the assets could "undermine the global financial architecture". Euroclear also has an roughly €16-17bn locked in Russia. Belgian Prime Minister 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 left open the possibility of legal action if it "presents significant risks" for his country. Explaining the EU's Proposal? The EU is racing against time ahead of next Thursday's summit to finalize a arrangement that Belgium can support. Previously the EU has refrained from accessing the frozen capital directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the profits is deemed safe as Russia is under sanction and the returns are not Moscow's sovereign assets. But international military aid for Ukraine has fallen significantly in 2025, and Europe has had trouble trying to cover the deficit caused by the US decision to all but stop funding Ukraine under President Donald Trump. There are presently two EU options designed to furnishing Ukraine with €90bn, to pay for a large portion of its financial requirements. The first is to raise the money on the markets, guaranteed by the EU budget as a collateral. This is Belgium's first choice but it demands a consensus by EU leaders and that would be difficult when Budapest and Bratislava oppose funding Ukraine's military. That leaves providing a loan of Ukraine cash from the Russian assets, which were originally held in bonds but have now predominantly turned into cash. That money is Euroclear property located within the European Central Bank. The European Commission accepts Belgium has justified fears and states it is confident it has addressed them. The scheme is for Belgium to be shielded with a assurance applying to all the €210bn of Russian assets in the EU. Should Euroclear incur losses of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own settlement agency which are in the EU. If Russia targeted Belgium itself, any ruling by a Russian court would not be recognized in the EU. As an important step, EU ambassadors are set to approve on Friday to freeze indefinitely Russia's central bank assets held in Europe permanently. Heretofore 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 emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an "immediate threat to the economic interests of the union" continues. Why Belgium is Not Yet Convinced The Belgian government is firm it remains a strong supporter of Ukraine, but perceives regulatory pitfalls in the plan and is concerned about being forced to deal with the consequences if things go wrong. A typically partisan political environment in this case has united behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "The Belgian economy is not large. Belgian GDP is around €565bn – think about if it would need to carry a €185bn bill," says Veerle Colaert, professor of financial law at KU Leuven University. Although the EU might be able to secure enough guarantees for the loan itself, Belgium is concerned about an added risk of being subject to extra fines or liabilities. Prof Colaert also argues the requirement for Euroclear to issue credit to the EU would violate EU banking regulations. "Lenders need to adhere to capital and liquidity requirements and shouldn't concentrate risk. Now the EU is instructing Euroclear to do just that. "What is the purpose of these bank rules? It's because we want banks to be stable. And if things turn sour it would be up to Belgium to bail out Euroclear. That's another reason why it's so crucial for Belgium to secure absolute assurances for Euroclear." The European Union In a Difficult Position from Multiple Fronts There is no time to lose, warn a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "the financially feasible and politically realistic solution". "It is a decisive moment for us," says leading German conservative MP Norbert Röttgen. "If we fail, I don't know what we'll do afterwards. 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 leaders in Europe that the US may want to deploy Russia's frozen billions for another purpose, as part of its own peace plan. Zelensky has indicated Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also aware the US has been engaging with Russia about possible partnership. An initial document 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