Russia Responds at the EU's Plan to Lend Immobilized Russian Cash to Kyiv

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

In the view of European leaders, the answer to plugging Kyiv's financial shortfall of €135.7bn for the coming 24 months rests with assets belonging to Russia that are frozen held by Belgian bank Euroclear, and EU leaders aim to finalize the plan at their EU leaders' conference next week.

Russian officials state the EU plan would be an act of theft, and the Central Bank of Russia declared on Friday it was taking to court Euroclear in a Moscow court prior to a conclusive plan is made.

'Appropriate' to Employ Russia's Funds, Say Ukraine and the EU

Overall, Russia has approximately €210bn of its funds immobilized in the EU, and €185bn of that is held by Euroclear.

European and Ukrainian authorities maintain that money should be used to rebuild what Russia has laid waste to: The European Commission terms it a "loan for reparations" and has devised a plan to support Ukraine's economy to the tune of €90bn.

"It is only just that Moscow's blocked funds should be used to reconstruct what Russia has destroyed – and that that capital then becomes ours," remarks Ukraine's Volodymyr Zelensky.

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

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

The Belgian government is anxious it will be burdened by an enormous bill if it all goes wrong, and Euroclear CEO Valérie Urbain says using the assets could "undermine the global financial architecture".

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

Belgian Prime Minister Bart de Wever has set the EU a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country.

Explaining the EU's Plan?

The EU is under pressure ahead of next Thursday's summit to come up with a solution that Belgium can support.

Previously the EU has held off touching the frozen capital directly but for the past year has paid the "extraordinary revenues" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the profits is deemed less risky as Russia is sanctioned and the earnings are not property of the Russian state.

But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to cover the shortfall left by the US decision to largely cease funding Ukraine under President Donald Trump.

There are presently two EU proposals seeking to furnishing Ukraine with €90bn, to pay for two-thirds of its funding needs.

• The first is to raise the money on capital markets, secured against the EU budget as a collateral. This is Belgium's preferred option but it needs a consensus by EU leaders and that would be problematic when Budapest and Bratislava object to funding Ukraine's military.
• This makes the other option loaning Ukraine cash from the frozen Russian funds, which were initially held in financial instruments but have now predominantly matured into cash. That funding is Euroclear property located within the European Central Bank.

The EU's executive recognizes Belgium has legitimate concerns and states it is assured it has dealt with them.

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

Should Euroclear suffer a loss of its own assets in Russia, the loss would be compensated from assets belonging to Russia's own settlement agency which are in the EU.

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

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

Until now they have had to vote by consensus every six months to renew the freeze, which could have meant a ongoing risk to Belgium.

The EU ambassadors are set to use an emergency clause under Article 122 of the EU Treaties so the assets stay blocked as long as an "clear risk to the economic interests of the union" continues.

The Reasons Belgium is Still Not Convinced

Belgium is firm it remains a committed partner of Ukraine, but perceives legal risks in the plan and fears being shouldering the consequences if things go wrong.

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

"The Belgian economy is not large. Belgian GDP is about €565bn – think about if it would need to shoulder a €185bn bill," says Veerle Colaert, expert in financial law at KU Leuven University.

Although the EU might be able to arrange enough guarantees for the loan itself, Belgium worries about an added risk of being subject to extra fines or liabilities.

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

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

"What is the purpose of these banking laws? It's because we want banks to be stable. And if things fail it would fall to Belgium to rescue Euroclear. That's an additional reason why it's so vital for Belgium to secure ironclad assurances for Euroclear."

The European Union Under Pressure from Every Direction

The situation is urgent, warn a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the proposal to use Russian funds is "a financially feasible and practically possible solution".

"It is a decisive moment for us," states leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do subsequently. That's why we have to finalize the deal in a week's time".

While Russia is unyielding its money should not be accessed, there are additional apprehensions among European figures 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 reconstruction fund, but he is also aware the US has been talking to Russia about future co-operation.

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