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

Ukraine is facing a severe shortage of funding to sustain its armed forces and economy, after almost four years of Russia's full-scale war.

For Europe, the remedy to plugging Ukraine's financial shortfall of €135.7bn for the coming 24 months lies in Moscow's immobilized funds held by Belgian bank Euroclear, and Brussels hope to give it the green light at their meeting in Brussels next week.

Moscow's representatives state the EU plan would be an act of theft, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a conclusive plan is made.

'Just' to Use Moscow's Funds, Say Kyiv and Brussels

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

Brussels and Kyiv contend that those funds should be used to restore what Russia has devastated: Brussels refers to it as a "loan for reparations" and has devised a plan to support Ukraine's economy amounting to €90bn.

"It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has devastated – and that those funds then becomes ours," states Ukrainian President Volodymyr Zelensky.

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

Moscow's lawsuit was expected in Brussels. But it is not just Moscow that is unhappy.

Belgium is anxious it will be burdened by an massive bill if it all backfires, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the international financial system".

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

Belgium's PM Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will accept the reparations plan, and he has left open the possibility of legal action if it "carries significant risks" for his country.

Explaining the EU's Strategy?

European Union officials is under pressure ahead of next Thursday's summit to come up with a compromise that Belgium can accept.

Until now the EU has avoided accessing the principal funds directly but starting in 2024 has transferred the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. From a legal standpoint, using the revenue is seen as less risky as Russia is subject to sanctions and the returns are not Russian sovereign property.

But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has struggled to make up the shortfall caused by the US decision to all but stop funding Ukraine under President Donald Trump.

There are at the moment two EU proposals aimed at providing Ukraine with €90bn, to finance two-thirds of its budgetary necessities.

• The first is to borrow the funds on financial markets, secured against the EU budget as a collateral. This is Belgium's first choice but it demands a agreement by all by EU leaders and that would be difficult when Budapest and Bratislava oppose funding Ukraine's military.
• This makes the other option providing a loan of Ukraine cash from the Moscow's immobilized capital, which were originally 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.

Brussels' executive arm acknowledges Belgium has valid worries and claims it is convinced it has resolved them.

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

Should Euroclear face a financial hit of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own clearing house which are in the EU.

Should Russia took legal action against Belgium itself, any judgment by a Russian court would not be recognized in the EU.

In a significant move, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future.

Previously they have had to vote unanimously 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 stay blocked as long as an "immediate threat to the economic interests of the union" continues.

The Reasons Belgium is Still Not Satisfied

The Belgian government is adamant it remains a staunch ally of Ukraine, but perceives regulatory pitfalls in the plan and fears being forced to deal with the consequences if things do not work out.

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

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

While the EU might be able to arrange enough protections for the loan itself, Belgium fears an additional danger of being subject to extra legal costs.

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

"Banks need to adhere to stability regulations and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do just that.

"Why do we have these financial regulations? It's because we want banks to be stable. And if things fail it would be up to Belgium to rescue Euroclear. That's an additional reason why it's so crucial for Belgium to get absolute assurances for Euroclear."

The European Union In a Difficult Position from All Sides

Time is of the essence, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "a economically realistic and practically possible solution".

"It is a decisive moment for us," says 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 finalize the deal in a week's time".

While Russia is insistent its money should not be used, there are additional apprehensions among EU officials that the US may want to use Russia's immobilized billions differently, as part of its own diplomatic proposal.

Zelensky has stated 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 potential collaboration.

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