🔗 Share this article Russia Retaliates at Europe's Scheme to Lend Frozen Russian Assets to Kyiv Kyiv remains depleting its financial resources to sustain its armed forces and economy, after almost four years of Russia's full-scale war. In the view of European leaders, the remedy to addressing Kyiv's funding gap of €135.7bn for the next two years is found in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week. Moscow's representatives warn the EU plan would be an confiscation, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a definitive agreement is made. 'Just' to Use Moscow's Assets, Argue Ukraine and the EU In total, Russia has about €210bn of its state reserves immobilized in the EU, and €185bn of that is held by Euroclear. Brussels and Kyiv maintain that that capital should be used to reconstruct what Russia has devastated: EU officials refers to it as a "loan for reparations" and has come up with a plan to support Ukraine's economy valued at €90bn. "It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that that capital then becomes ours," says Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz says the assets will "enable Ukraine to protect itself effectively against subsequent Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is unhappy. Belgium is worried it will be saddled with an massive bill if it all backfires, and Euroclear chief executive Valérie Urbain says using the assets could "destabilise the world's financial order". Euroclear also has an roughly €16-17bn locked in Russia. The leader of Belgium Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will endorse the reparations plan, and he has left open the possibility of legal action if it "poses significant risks" for his country. What is the EU's Strategy? Brussels is racing against time before next Thursday's summit to come up with a compromise that Belgium can agree to. So far the EU has held off using the frozen capital directly but for the past year has transferred the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the revenue is considered permissible as Russia is subject to sanctions and the proceeds are not Moscow's sovereign assets. But international military aid for Ukraine has slipped dramatically in 2025, and Europe has struggled to cover the deficit left by the US decision to largely cease funding Ukraine under President Donald Trump. There are presently two EU options designed to furnishing Ukraine with €90bn, to pay for a majority of its financial requirements. The first is to secure the capital on the markets, backed by the EU budget as a guarantee. This is Belgium's first choice but it needs a consensus by EU leaders and that would be challenging when Hungary and Slovakia are against funding Ukraine's military. The alternative is loaning Ukraine cash from the Russian assets, which were originally held in financial instruments but have now predominantly turned into cash. That capital is an asset of Euroclear held in the European Central Bank. The European Commission acknowledges Belgium has justified fears and states it is assured it has addressed them. The scheme is for Belgium to be safeguarded with a insurance encompassing all the €210bn of Russian assets in the EU. If 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 targeted Belgium itself, any ruling by a Russian court would not be accepted 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 indefinitely. 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 planning to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the financial well-being of the union" continues. Why Belgium is Remains Convinced The Belgian government is adamant it remains a committed partner of Ukraine, but identifies juridical dangers in the plan and fears being left to handle the consequences if things do not work out. A usually divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – consider if it would need to bear a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to secure sufficient assurances for the loan itself, Belgium fears an added risk of being vulnerable to extra damages or penalties. Prof Colaert also believes the stipulation for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to comply with stability regulations and shouldn't put all their eggs in one basket. Now the EU is instructing Euroclear to do exactly that. "What is the purpose of these banking laws? It's because we want banks to be solvent. And if things turn sour it would be up to Belgium to rescue Euroclear. That's a further cause why it's so crucial for Belgium to secure absolute assurances for Euroclear." The European Union Facing Strain from All Sides There is no time to lose, warn several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a financially feasible and politically achievable solution". "It is a decisive moment for us," says 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 adamant its money should not be accessed, there are added concerns among leaders in Europe that the US may want to employ Russia's frozen billions differently, as part of its own peace initiative. Zelensky has indicated Ukraine is in discussions with Europe and the US on a reconstruction fund, but he is also aware the US has been engaging with Russia about future co-operation. A preliminary version of the US peace plan referred to $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains depleting its financial resources to sustain its armed forces and economy, after almost four years of Russia's full-scale war. In the view of European leaders, the remedy to addressing Kyiv's funding gap of €135.7bn for the next two years is found in assets belonging to Russia that are frozen located within Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week. Moscow's representatives warn the EU plan would be an confiscation, and Russia's central bank declared on Friday it was taking to court Euroclear in a Moscow court ahead of a definitive agreement is made. 'Just' to Use Moscow's Assets, Argue Ukraine and the EU In total, Russia has about €210bn of its state reserves immobilized in the EU, and €185bn of that is held by Euroclear. Brussels and Kyiv maintain that that capital should be used to reconstruct what Russia has devastated: EU officials refers to it as a "loan for reparations" and has come up with a plan to support Ukraine's economy valued at €90bn. "It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that that capital then becomes ours," says Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz says the assets will "enable Ukraine to protect itself effectively against subsequent Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is unhappy. Belgium is worried it will be saddled with an massive bill if it all backfires, and Euroclear chief executive Valérie Urbain says using the assets could "destabilise the world's financial order". Euroclear also has an roughly €16-17bn locked in Russia. The leader of Belgium Bart de Wever has set the EU a series of "rational, reasonable, and justified conditions" before he will endorse the reparations plan, and he has left open the possibility of legal action if it "poses significant risks" for his country. What is the EU's Strategy? Brussels is racing against time before next Thursday's summit to come up with a compromise that Belgium can agree to. So far the EU has held off using the frozen capital directly but for the past year has transferred the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. Juridically, using the revenue is considered permissible as Russia is subject to sanctions and the proceeds are not Moscow's sovereign assets. But international military aid for Ukraine has slipped dramatically in 2025, and Europe has struggled to cover the deficit left by the US decision to largely cease funding Ukraine under President Donald Trump. There are presently two EU options designed to furnishing Ukraine with €90bn, to pay for a majority of its financial requirements. The first is to secure the capital on the markets, backed by the EU budget as a guarantee. This is Belgium's first choice but it needs a consensus by EU leaders and that would be challenging when Hungary and Slovakia are against funding Ukraine's military. The alternative is loaning Ukraine cash from the Russian assets, which were originally held in financial instruments but have now predominantly turned into cash. That capital is an asset of Euroclear held in the European Central Bank. The European Commission acknowledges Belgium has justified fears and states it is assured it has addressed them. The scheme is for Belgium to be safeguarded with a insurance encompassing all the €210bn of Russian assets in the EU. If 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 targeted Belgium itself, any ruling by a Russian court would not be accepted 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 indefinitely. 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 planning to use an extraordinary measure under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the financial well-being of the union" continues. Why Belgium is Remains Convinced The Belgian government is adamant it remains a committed partner of Ukraine, but identifies juridical dangers in the plan and fears being left to handle the consequences if things do not work out. A usually divided political landscape in this case has come together in support of Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – consider if it would need to bear a €185bn bill," notes Veerle Colaert, academic specializing in financial regulation at KU Leuven University. While the EU might be able to secure sufficient assurances for the loan itself, Belgium fears an added risk of being vulnerable to extra damages or penalties. Prof Colaert also believes the stipulation for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to comply with stability regulations and shouldn't put all their eggs in one basket. Now the EU is instructing Euroclear to do exactly that. "What is the purpose of these banking laws? It's because we want banks to be solvent. And if things turn sour it would be up to Belgium to rescue Euroclear. That's a further cause why it's so crucial for Belgium to secure absolute assurances for Euroclear." The European Union Facing Strain from All Sides There is no time to lose, warn several EU member states including those bordering Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a financially feasible and politically achievable solution". "It is a decisive moment for us," says 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 adamant its money should not be accessed, there are added concerns among leaders in Europe that the US may want to employ Russia's frozen billions differently, as part of its own peace initiative. Zelensky has indicated Ukraine is in discussions with Europe and the US on a reconstruction fund, but he is also aware the US has been engaging with Russia about future co-operation. A preliminary version of the US peace plan referred to $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving