🔗 Share this article Russia Responds at the EU's Scheme to Loan Frozen Russian Cash to Kyiv Kyiv remains running out of cash to sustain its armed forces and economy, after almost four years of Russia's full-scale war. For Europe, the answer to plugging Kyiv's financial shortfall of €135.7bn for the coming 24 months lies in Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels hope to finalize the plan at their meeting in Brussels next week. Authorities in Russia warn the EU plan would be an confiscation, and Russia's central bank stated on Friday it was suing Euroclear in a Moscow court ahead of a definitive agreement is made. 'Appropriate' to Employ Russia's Assets, Assert Ukraine and the EU In total, Russia has about €210bn of its funds frozen in the EU, and €185bn of that is held by Euroclear. The EU and Ukraine maintain that those funds should be used to restore what Russia has devastated: Brussels refers to it as a "loan for reparations" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It is only just that Russia's frozen assets should be used to reconstruct what Russia has destroyed – and that that capital then becomes Ukraine's," states Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "allow Ukraine to defend itself effectively against any future Russian attacks". Russia's court action was expected in Brussels. But it is not just Moscow that is unhappy. The Belgian government is concerned it will be left with an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "undermine the international financial system". Euroclear also has an roughly €16-17bn frozen in Russia. Belgium's PM Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reconstruction loan scheme, and he has left open the possibility of legal action if it "carries significant risks" for his country. What is the EU's Proposal? The EU is under pressure prior to next Thursday's summit to finalize a solution that Belgium can agree to. Until now the EU has avoided touching the frozen capital directly but since last year has paid the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. From a legal standpoint, using the interest is considered less risky as Russia is under sanction and the proceeds are not Russian sovereign property. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has found it difficult to cover the deficit caused by the US decision to largely cease funding Ukraine under President Donald Trump. There are presently two EU proposals designed to providing Ukraine with €90bn, to pay for a majority of its funding needs. One is to borrow the funds on financial markets, backed by the EU budget as a guarantee. This is Belgium's favored solution but it requires a consensus by EU leaders and that would be problematic when Hungary and Slovakia oppose funding Ukraine's military. This makes the other option loaning Ukraine cash from the frozen Russian funds, which were initially held in bonds but have now predominantly been converted into cash. That funding is owned by Euroclear located within the European Central Bank. Brussels' executive arm acknowledges Belgium has valid worries and states it is confident it has resolved them. The plan is for Belgium to be protected with a guarantee covering all the €210bn of Russian assets in the EU. If Euroclear face a financial hit of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own clearing house which are in the EU. In the event that Russia went after Belgium itself, any decision by a Russian court would not be accepted 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 permanently. Previously they have had to vote by consensus every six months to extend the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are expected to use an special provision under Article 122 of the EU Treaties so the assets remain frozen as long as an "clear risk to the economic interests of the union" continues. Why Belgium is Not Yet On Board Brussels is insistent it remains a staunch ally of Ukraine, but identifies legal risks in the plan and worries about being left to handle the repercussions if things fail. A typically fractured political scene in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from fellow EU leaders. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine 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 obtain sufficient assurances for the loan itself, Belgium fears an added risk of being vulnerable to extra damages or penalties. Prof Colaert also believes the requirement for Euroclear to grant a loan to the EU would contravene EU banking regulations. "Lenders need to comply with prudential rules and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do just that. "What is the purpose of these bank rules? It's because we want banks to be solvent. And if things fail it would fall to Belgium to rescue Euroclear. That's an additional reason why it's so crucial for Belgium to get water-tight assurances for Euroclear." EU Leaders Under Pressure from All Sides Time is of the essence, state a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "the most financially feasible and practically possible solution". "It's a matter of destiny for us," says 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 insistent 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 in another way, 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 aware the US has been talking to Russia about future co-operation. An initial document of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains running out of cash to sustain its armed forces and economy, after almost four years of Russia's full-scale war. For Europe, the answer to plugging Kyiv's financial shortfall of €135.7bn for the coming 24 months lies in Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels hope to finalize the plan at their meeting in Brussels next week. Authorities in Russia warn the EU plan would be an confiscation, and Russia's central bank stated on Friday it was suing Euroclear in a Moscow court ahead of a definitive agreement is made. 'Appropriate' to Employ Russia's Assets, Assert Ukraine and the EU In total, Russia has about €210bn of its funds frozen in the EU, and €185bn of that is held by Euroclear. The EU and Ukraine maintain that those funds should be used to restore what Russia has devastated: Brussels refers to it as a "loan for reparations" and has come up with a plan to bolster Ukraine's economy to the tune of €90bn. "It is only just that Russia's frozen assets should be used to reconstruct what Russia has destroyed – and that that capital then becomes Ukraine's," states Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "allow Ukraine to defend itself effectively against any future Russian attacks". Russia's court action was expected in Brussels. But it is not just Moscow that is unhappy. The Belgian government is concerned it will be left with an huge bill if it all backfires, and Euroclear chief executive Valérie Urbain argues using the assets could "undermine the international financial system". Euroclear also has an roughly €16-17bn frozen in Russia. Belgium's PM Bart de Wever has presented the EU with a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reconstruction loan scheme, and he has left open the possibility of legal action if it "carries significant risks" for his country. What is the EU's Proposal? The EU is under pressure prior to next Thursday's summit to finalize a solution that Belgium can agree to. Until now the EU has avoided touching the frozen capital directly but since last year has paid the "windfall profits" from them to Ukraine. In 2024 that amounted to €3.7bn. From a legal standpoint, using the interest is considered less risky as Russia is under sanction and the proceeds are not Russian sovereign property. But foreign defense assistance for Ukraine has fallen significantly in 2025, and Europe has found it difficult to cover the deficit caused by the US decision to largely cease funding Ukraine under President Donald Trump. There are presently two EU proposals designed to providing Ukraine with €90bn, to pay for a majority of its funding needs. One is to borrow the funds on financial markets, backed by the EU budget as a guarantee. This is Belgium's favored solution but it requires a consensus by EU leaders and that would be problematic when Hungary and Slovakia oppose funding Ukraine's military. This makes the other option loaning Ukraine cash from the frozen Russian funds, which were initially held in bonds but have now predominantly been converted into cash. That funding is owned by Euroclear located within the European Central Bank. Brussels' executive arm acknowledges Belgium has valid worries and states it is confident it has resolved them. The plan is for Belgium to be protected with a guarantee covering all the €210bn of Russian assets in the EU. If Euroclear face a financial hit of its own assets in Russia, the shortfall would be covered from assets belonging to Russia's own clearing house which are in the EU. In the event that Russia went after Belgium itself, any decision by a Russian court would not be accepted 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 permanently. Previously they have had to vote by consensus every six months to extend the freeze, which could have meant a repeated risk to Belgium. The EU ambassadors are expected to use an special provision under Article 122 of the EU Treaties so the assets remain frozen as long as an "clear risk to the economic interests of the union" continues. Why Belgium is Not Yet On Board Brussels is insistent it remains a staunch ally of Ukraine, but identifies legal risks in the plan and worries about being left to handle the repercussions if things fail. A typically fractured political scene in this case has come together in support of Prime Minister Bart de Wever, who is under pressure from fellow EU leaders. "Belgium has a modest-sized economy. Belgian GDP is approximately €565bn – imagine 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 obtain sufficient assurances for the loan itself, Belgium fears an added risk of being vulnerable to extra damages or penalties. Prof Colaert also believes the requirement for Euroclear to grant a loan to the EU would contravene EU banking regulations. "Lenders need to comply with prudential rules and shouldn't make one enormous loan. Now the EU is instructing Euroclear to do just that. "What is the purpose of these bank rules? It's because we want banks to be solvent. And if things fail it would fall to Belgium to rescue Euroclear. That's an additional reason why it's so crucial for Belgium to get water-tight assurances for Euroclear." EU Leaders Under Pressure from All Sides Time is of the essence, state a group of EU member states including those closest to Russia such as the Baltics, Finland and Poland. They believe the scheme involving immobilized capital is "the most financially feasible and practically possible solution". "It's a matter of destiny for us," says 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 insistent 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 in another way, 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 aware the US has been talking to Russia about future co-operation. An initial document of the US peace plan suggested $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving