Moscow Responds at the EU's Proposal to Lend Frozen Russian Cash to Ukraine

Ukraine is depleting its cash to keep going its military and economy, after almost four years of the ongoing invasion by Moscow.

In the view of European leaders, the remedy to addressing Kyiv's financial shortfall of €135.7bn for the next two years lies in assets belonging to Russia that are frozen sitting in Belgian bank Euroclear, and EU leaders seek to sign that off at their Brussels summit next week.

Moscow's representatives warn the EU plan would be an confiscation, and Moscow's monetary authority announced on Friday it was taking to court Euroclear in a Moscow court prior to a final decision is made.

'Just' to Utilize Moscow's Assets, Assert Ukraine and the EU

In total, Russia has roughly €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear.

European and Ukrainian authorities maintain that money should be used to rebuild what Russia has destroyed: Brussels calls it a "loan for reparations" and has come up with a plan to support Ukraine's economy to the tune of €90bn.

"It is only just that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that money then becomes ours," states Ukraine's Volodymyr Zelensky.

Chancellor Friedrich Merz argues the assets will "allow Ukraine to protect itself efficiently against future Russian attacks".

The legal move by Moscow was expected in Brussels. But it is not just Moscow that is unhappy.

Authorities in Brussels is anxious it will be saddled with an huge bill if it all goes wrong, and Euroclear chief executive Valérie Urbain warns using the assets could "undermine the world's financial order".

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

The leader of Belgium Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will endorse the reconstruction loan scheme, and he has left open the possibility of legal action if it "presents significant risks" for his country.

The Details of the EU's Proposal?

European Union officials is working to the wire before next Thursday's summit to come up with a compromise that Belgium can agree to.

Until now the EU has held off using the assets themselves directly but for the past year has paid the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Legally, using the interest is considered less risky as Russia is under sanction and the returns are not Russian sovereign property.

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

There are at the moment two EU proposals seeking to furnishing Ukraine with €90bn, to finance a majority of its budgetary necessities.

• The first is to borrow the funds on capital markets, backed by the EU budget as a collateral. This is Belgium's first choice but it needs a consensus by EU leaders and that would be challenging when Budapest and Bratislava oppose funding Ukraine's military.
• The alternative is providing a loan of Ukraine cash from the Moscow's immobilized capital, which were originally held in financial instruments but have now largely been converted into cash. That capital is Euroclear property deposited at the European Central Bank.

Brussels' executive arm recognizes Belgium has legitimate concerns and claims it is assured it has resolved them.

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

If 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.

Should Russia went after Belgium itself, any judgment by a Russian court would not be accepted in the EU.

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

Previously they have had to vote unanimously 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 "direct danger to the economic interests of the union" continues.

The Reasons Belgium is Remains On Board

Brussels is insistent it remains a strong supporter of Ukraine, but identifies juridical dangers in the plan and worries about being forced to deal with the repercussions if things go wrong.

A usually divided political landscape in this case has rallied behind 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 bear a €185bn bill," says Veerle Colaert, professor of financial law at KU Leuven University.

While the EU might be able to obtain adequate assurances for the loan itself, Belgium fears an added risk of being vulnerable to extra legal costs.

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

"Financial institutions need to comply with prudential rules and shouldn't concentrate risk. 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 turn sour it would fall to Belgium to save Euroclear. That's a further cause why it's so crucial for Belgium to secure water-tight guarantees for Euroclear."

EU Leaders In a Difficult Position from Multiple Fronts

The situation is urgent, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "the most fiscally viable and politically achievable solution".

"It's a matter of destiny for us," states leading German conservative MP Norbert Röttgen. "If we fail, 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 adamant its money should not be accessed, there are added concerns among leaders in Europe that the US may want to deploy Russia's frozen billions for another purpose, as part of its own peace initiative.

Zelensky has stated Ukraine is in discussions with Europe and the US on a recovery fund, but he is also cognizant the US has been talking to Russia about future co-operation.

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