🔗 Share this article Russia Retaliates at Europe's Scheme to Loan Immobilized Russian Cash to Kyiv Kyiv remains facing a severe shortage of funding to keep going its military and economy, after almost four years of Russia's full-scale war. In the view of European leaders, the remedy to addressing Ukraine's funding gap of €135.7bn for the following biennium lies in Moscow's immobilized funds sitting in Belgian bank Euroclear, and EU leaders hope to give it the green light at their meeting in Brussels next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was suing Euroclear in a Moscow court even before a conclusive plan is made. 'Just' to Employ Russia's Funds, Say European and Ukrainian Officials In total, Russia has approximately €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities argue that those funds should be used to restore what Russia has destroyed: Brussels calls it a "reparations loan" and has proposed a plan to bolster Ukraine's economy amounting to €90bn. "It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has devastated – and that money then becomes Ukraine's," states Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz states the assets will "allow Ukraine to protect itself efficiently against any future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is dissatisfied. Belgium is anxious it will be saddled with an enormous bill if it all backfires, and Euroclear chief executive Valérie Urbain warns using the assets could "disrupt the international financial system". 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 accept the reconstruction loan scheme, and he has refused to rule out legal action if it "presents significant risks" for his country. What is the EU's Plan? Brussels is working to the wire before next Thursday's summit to finalize a solution that Belgium can accept. Previously the EU has avoided using the principal funds directly but starting in 2024 has paid the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the profits is considered permissible as Russia is subject to sanctions and the returns are not Russian sovereign property. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to make up the deficit resulting from the US decision to all but stop funding Ukraine under President Donald Trump. There are currently two EU options designed to providing Ukraine with €90bn, to pay for a large portion of its budgetary necessities. Option one is to secure the capital on financial markets, secured against the EU budget as a collateral. This is Belgium's favored solution but it requires a unanimous vote by EU leaders and that would be challenging when Hungary and Slovakia are against funding Ukraine's military. That leaves lending Ukraine cash from the Russian assets, which were initially held in bonds but have now mostly been converted into cash. That funding is Euroclear property deposited at the European Central Bank. The EU's executive acknowledges Belgium has valid worries and claims it is convinced it has addressed them. The plan is for Belgium to be protected with a insurance applying to all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU. If Russia went after Belgium itself, any ruling by a Russian court would not be accepted in the EU. In a significant move, EU ambassadors are set to approve on Friday to permanently block Russia's central bank assets held in Europe indefinitely. Previously they have had to vote unanimously every six months to extend the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are planning 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. Why Belgium is Remains Convinced Belgium is insistent it remains a staunch ally of Ukraine, but identifies regulatory pitfalls in the plan and is concerned about being shouldering the fallout if things fail. A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from fellow EU leaders. "The Belgian economy is not large. Belgian GDP is approximately €565bn – imagine if it would need to shoulder a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. While the EU might be able to arrange sufficient protections for the loan itself, Belgium worries about an additional danger of being vulnerable to extra fines or liabilities. Prof Colaert also believes the demand for Euroclear to issue credit to the EU would breach EU banking regulations. "Financial institutions need to comply with capital and liquidity requirements and shouldn't concentrate risk. Now the EU is asking Euroclear to do exactly that. "What is the purpose of these financial regulations? It's because we want banks to be solvent. And if things go wrong it would become the responsibility of Belgium to save Euroclear. That's another reason why it's so vital for Belgium to get ironclad guarantees for Euroclear." EU Leaders Under Pressure from Every Direction The situation is urgent, warn several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the most financially feasible and politically realistic solution". "It's a matter of destiny for us," warns leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do subsequently. 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 additional apprehensions among EU officials that the US may want to use Russia's blocked funds in another way, as part of its own peace plan. Zelensky has stated Ukraine is working with Europe and the US on a reconstruction fund, but he is also mindful the US has been holding discussions with Russia about future co-operation. An early draft of the US peace plan mentioned $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains facing a severe shortage of funding to keep going its military and economy, after almost four years of Russia's full-scale war. In the view of European leaders, the remedy to addressing Ukraine's funding gap of €135.7bn for the following biennium lies in Moscow's immobilized funds sitting in Belgian bank Euroclear, and EU leaders hope to give it the green light at their meeting in Brussels next week. Russian officials state the EU plan would be an illegal seizure, and the Central Bank of Russia declared on Friday it was suing Euroclear in a Moscow court even before a conclusive plan is made. 'Just' to Employ Russia's Funds, Say European and Ukrainian Officials In total, Russia has approximately €210bn of its assets blocked in the EU, and €185bn of that is managed by Euroclear. European and Ukrainian authorities argue that those funds should be used to restore what Russia has destroyed: Brussels calls it a "reparations loan" and has proposed a plan to bolster Ukraine's economy amounting to €90bn. "It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has devastated – and that money then becomes Ukraine's," states Ukraine's Volodymyr Zelensky. Germany's leader Friedrich Merz states the assets will "allow Ukraine to protect itself efficiently against any future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not only Moscow that is dissatisfied. Belgium is anxious it will be saddled with an enormous bill if it all backfires, and Euroclear chief executive Valérie Urbain warns using the assets could "disrupt the international financial system". 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 accept the reconstruction loan scheme, and he has refused to rule out legal action if it "presents significant risks" for his country. What is the EU's Plan? Brussels is working to the wire before next Thursday's summit to finalize a solution that Belgium can accept. Previously the EU has avoided using the principal funds directly but starting in 2024 has paid the "excess income" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the profits is considered permissible as Russia is subject to sanctions and the returns are not Russian sovereign property. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to make up the deficit resulting from the US decision to all but stop funding Ukraine under President Donald Trump. There are currently two EU options designed to providing Ukraine with €90bn, to pay for a large portion of its budgetary necessities. Option one is to secure the capital on financial markets, secured against the EU budget as a collateral. This is Belgium's favored solution but it requires a unanimous vote by EU leaders and that would be challenging when Hungary and Slovakia are against funding Ukraine's military. That leaves lending Ukraine cash from the Russian assets, which were initially held in bonds but have now mostly been converted into cash. That funding is Euroclear property deposited at the European Central Bank. The EU's executive acknowledges Belgium has valid worries and claims it is convinced it has addressed them. The plan is for Belgium to be protected with a insurance applying to all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own clearing house which are in the EU. If Russia went after Belgium itself, any ruling by a Russian court would not be accepted in the EU. In a significant move, EU ambassadors are set to approve on Friday to permanently block Russia's central bank assets held in Europe indefinitely. Previously they have had to vote unanimously every six months to extend the freeze, which could have meant a constant risk to Belgium. The EU ambassadors are planning 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. Why Belgium is Remains Convinced Belgium is insistent it remains a staunch ally of Ukraine, but identifies regulatory pitfalls in the plan and is concerned about being shouldering the fallout if things fail. A typically partisan political environment in this case has come together in support of Prime Minister Bart de Wever, who is being pressured from fellow EU leaders. "The Belgian economy is not large. Belgian GDP is approximately €565bn – imagine if it would need to shoulder a €185bn bill," comments Veerle Colaert, professor of financial law at KU Leuven University. While the EU might be able to arrange sufficient protections for the loan itself, Belgium worries about an additional danger of being vulnerable to extra fines or liabilities. Prof Colaert also believes the demand for Euroclear to issue credit to the EU would breach EU banking regulations. "Financial institutions need to comply with capital and liquidity requirements and shouldn't concentrate risk. Now the EU is asking Euroclear to do exactly that. "What is the purpose of these financial regulations? It's because we want banks to be solvent. And if things go wrong it would become the responsibility of Belgium to save Euroclear. That's another reason why it's so vital for Belgium to get ironclad guarantees for Euroclear." EU Leaders Under Pressure from Every Direction The situation is urgent, warn several EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They maintain the scheme involving immobilized capital is "the most financially feasible and politically realistic solution". "It's a matter of destiny for us," warns leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do subsequently. 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 additional apprehensions among EU officials that the US may want to use Russia's blocked funds in another way, as part of its own peace plan. Zelensky has stated Ukraine is working with Europe and the US on a reconstruction fund, but he is also mindful the US has been holding discussions with Russia about future co-operation. An early draft of the US peace plan mentioned $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving