🔗 Share this article Russia Responds at the EU's Proposal to Loan Immobilized Russian Funds to Ukraine Ukraine is running out of funding to maintain its armed forces and economy, after close to 48 months of the ongoing invasion by Moscow. For Europe, the remedy to filling Ukraine's budget hole of €135.7bn for the coming 24 months lies in frozen Russian assets located within Belgian bank Euroclear, and Brussels hope to give it the green light at their Brussels summit next week. Moscow's representatives state the EU plan would be an illegal seizure, and Russia's central bank announced on Friday it was suing Euroclear in a Moscow court even before a final decision is made. 'Appropriate' to Employ Russia's Funds, Say European and Ukrainian Officials Overall, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear. Brussels and Kyiv contend that money should be used to restore what Russia has laid waste to: The European Commission calls it a "loan for reparations" and has proposed a plan to bolster Ukraine's economy valued at €90bn. "It is appropriate that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that money then becomes ours," remarks Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz argues the assets will "enable Ukraine to shield itself effectively against subsequent Russian attacks". The legal move by Moscow was anticipated in Brussels. But it is not only Moscow that is unhappy. The Belgian government is concerned it will be burdened by an enormous bill if it all fails, and Euroclear CEO Valérie Urbain says using the assets could "undermine the international financial system". Euroclear also has an roughly €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 agree to the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country. Explaining the EU's Strategy? European Union officials is racing against time before next Thursday's summit to agree on a compromise that Belgium can accept. Until now the EU has refrained from accessing the assets themselves directly but starting in 2024 has paid the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. From a legal standpoint, using the interest is seen as permissible as Russia is subject to sanctions and the proceeds are not Moscow's sovereign assets. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to cover the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU proposals aimed at providing Ukraine with €90bn, to cover a majority of its budgetary necessities. Option one is to secure the capital on the markets, guaranteed by the EU budget as a surety. This is Belgium's first choice but it requires a unanimous vote by EU leaders and that would be difficult when Hungary and Slovakia oppose funding Ukraine's military. The alternative is lending Ukraine cash from the frozen Russian funds, which were at first held in securities but have now largely been converted into cash. That money is owned by Euroclear held in the European Central Bank. Brussels' executive arm recognizes Belgium has legitimate concerns and states it is confident it has addressed them. The proposal is for Belgium to be shielded with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own settlement agency which are in the EU. In the event that Russia went after Belgium itself, any judgment by a Russian court would not be recognized in the EU. As an important step, EU ambassadors are expected to agree on Friday to freeze indefinitely Russia's central bank assets held in Europe indefinitely. Heretofore 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 set to use an special provision 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 On Board Belgium is insistent it remains a staunch ally of Ukraine, but sees regulatory pitfalls in the plan and is concerned about being forced to deal with the fallout if things fail. A typically divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium is a small economy. Belgian GDP is approximately €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, expert in financial law at KU Leuven University. While the EU might be able to arrange sufficient guarantees for the loan itself, Belgium is concerned about an added risk of being vulnerable to extra fines or liabilities. Prof Colaert also contends the demand for Euroclear to grant a loan 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 telling Euroclear to do exactly 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 be up to Belgium to save Euroclear. That's another reason why it's so important for Belgium to get water-tight guarantees for Euroclear." EU Leaders In a Difficult Position from Multiple Fronts The situation is urgent, state a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a economically realistic and politically achievable 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 insistent its money should not be used, there are added concerns among EU officials that the US may want to deploy Russia's frozen billions for another purpose, as part of its own peace plan. Zelensky has said Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also aware the US has been talking to Russia about possible partnership. 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
Ukraine is running out of funding to maintain its armed forces and economy, after close to 48 months of the ongoing invasion by Moscow. For Europe, the remedy to filling Ukraine's budget hole of €135.7bn for the coming 24 months lies in frozen Russian assets located within Belgian bank Euroclear, and Brussels hope to give it the green light at their Brussels summit next week. Moscow's representatives state the EU plan would be an illegal seizure, and Russia's central bank announced on Friday it was suing Euroclear in a Moscow court even before a final decision is made. 'Appropriate' to Employ Russia's Funds, Say European and Ukrainian Officials Overall, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is managed by Euroclear. Brussels and Kyiv contend that money should be used to restore what Russia has laid waste to: The European Commission calls it a "loan for reparations" and has proposed a plan to bolster Ukraine's economy valued at €90bn. "It is appropriate that Moscow's blocked funds should be used to reconstruct what Russia has devastated – and that money then becomes ours," remarks Ukrainian President Volodymyr Zelensky. German Chancellor Friedrich Merz argues the assets will "enable Ukraine to shield itself effectively against subsequent Russian attacks". The legal move by Moscow was anticipated in Brussels. But it is not only Moscow that is unhappy. The Belgian government is concerned it will be burdened by an enormous bill if it all fails, and Euroclear CEO Valérie Urbain says using the assets could "undermine the international financial system". Euroclear also has an roughly €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 agree to the reparations plan, and he has refused to rule out legal action if it "presents significant risks" for his country. Explaining the EU's Strategy? European Union officials is racing against time before next Thursday's summit to agree on a compromise that Belgium can accept. Until now the EU has refrained from accessing the assets themselves directly but starting in 2024 has paid the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. From a legal standpoint, using the interest is seen as permissible as Russia is subject to sanctions and the proceeds are not Moscow's sovereign assets. But international military aid for Ukraine has fallen significantly in 2025, and Europe has struggled to cover the deficit resulting from the US decision to largely cease funding Ukraine under President Donald Trump. There are at the moment two EU proposals aimed at providing Ukraine with €90bn, to cover a majority of its budgetary necessities. Option one is to secure the capital on the markets, guaranteed by the EU budget as a surety. This is Belgium's first choice but it requires a unanimous vote by EU leaders and that would be difficult when Hungary and Slovakia oppose funding Ukraine's military. The alternative is lending Ukraine cash from the frozen Russian funds, which were at first held in securities but have now largely been converted into cash. That money is owned by Euroclear held in the European Central Bank. Brussels' executive arm recognizes Belgium has legitimate concerns and states it is confident it has addressed them. The proposal is for Belgium to be shielded with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear face a financial hit of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own settlement agency which are in the EU. In the event that Russia went after Belgium itself, any judgment by a Russian court would not be recognized in the EU. As an important step, EU ambassadors are expected to agree on Friday to freeze indefinitely Russia's central bank assets held in Europe indefinitely. Heretofore 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 set to use an special provision 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 On Board Belgium is insistent it remains a staunch ally of Ukraine, but sees regulatory pitfalls in the plan and is concerned about being forced to deal with the fallout if things fail. A typically divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is facing pressure from European colleagues. "Belgium is a small economy. Belgian GDP is approximately €565bn – think about if it would need to bear a €185bn bill," comments Veerle Colaert, expert in financial law at KU Leuven University. While the EU might be able to arrange sufficient guarantees for the loan itself, Belgium is concerned about an added risk of being vulnerable to extra fines or liabilities. Prof Colaert also contends the demand for Euroclear to grant a loan 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 telling Euroclear to do exactly 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 be up to Belgium to save Euroclear. That's another reason why it's so important for Belgium to get water-tight guarantees for Euroclear." EU Leaders In a Difficult Position from Multiple Fronts The situation is urgent, state a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the proposal to use Russian funds is "a economically realistic and politically achievable 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 insistent its money should not be used, there are added concerns among EU officials that the US may want to deploy Russia's frozen billions for another purpose, as part of its own peace plan. Zelensky has said Ukraine is coordinating with Europe and the US on a reconstruction fund, but he is also aware the US has been talking to Russia about possible partnership. 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