🔗 Share this article Russia Responds at Europe's Scheme to Lend Frozen Russian Funds to Kyiv Kyiv remains running out of funding to maintain its military and economy, after nearly four years of Russia's full-scale war. For Europe, the solution to filling Ukraine's funding gap of €135.7bn for the coming 24 months lies in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and European Union officials aim 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 suing Euroclear in a Moscow court even before a final decision is made. 'Just' to Use Moscow's Funds, Assert Ukraine and the EU All told, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities maintain that money should be used to reconstruct what Russia has laid waste to: The European Commission refers to it as a "loan for reparations" and has proposed a plan to bolster Ukraine's economy amounting to €90bn. "It's only fair that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that those funds then becomes Ukraine's," states Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "help Ukraine to defend itself efficiently against any future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is concerned. The Belgian government is concerned it will be saddled with an massive bill if it all fails, and Euroclear chief executive Valérie Urbain says using the assets could "destabilise the global financial architecture". Euroclear also has an roughly €16-17bn locked in Russia. The leader of Belgium Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reconstruction loan scheme, and he has refused to rule out legal action if it "presents significant risks" for his country. Explaining the EU's Strategy? The EU is working to the wire before next Thursday's summit to come up with a solution that Belgium can support. So far the EU has held off touching the frozen capital directly but for the past year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the profits is deemed permissible as Russia is under sanction and the returns are not property of the Russian state. But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to cover the gap resulting from the US decision to virtually halt funding Ukraine under President Donald Trump. There are at the moment two EU proposals aimed at providing Ukraine with €90bn, to finance two-thirds of its financial requirements. The first is to secure the capital on financial markets, backed by the EU budget as a guarantee. This is Belgium's preferred option but it requires a agreement by all by EU leaders and that would be challenging when two member states are against funding Ukraine's military. The alternative is loaning Ukraine cash from the frozen Russian funds, which were initially held in bonds but have now mostly been converted into cash. That funding is owned by Euroclear held in the European Central Bank. Brussels' executive arm accepts Belgium has justified fears and claims it is convinced it has addressed them. The scheme is for Belgium to be protected with a insurance encompassing all the €210bn of Russian assets in the EU. Should Euroclear suffer a loss 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. In the event that Russia targeted Belgium itself, any decision by a Russian court would not be accepted in the EU. In a significant move, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe permanently. 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 expected to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "clear risk to the economic interests of the union" continues. The Reasons Belgium is Still Not Satisfied Brussels is firm it remains a strong supporter of Ukraine, but sees legal risks in the plan and is concerned about being shouldering the repercussions if things fail. A usually divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from European colleagues. "Belgium is a small economy. Belgian GDP is about €565bn – think about if it would need to carry a €185bn bill," comments Veerle Colaert, expert in financial law at KU Leuven University. Although the EU might be able to secure adequate protections for the loan itself, Belgium worries about an additional danger of being vulnerable to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to comply with prudential rules and shouldn't concentrate risk. 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 stable. And if things go wrong it would fall to Belgium to bail out Euroclear. That's another reason why it's so important for Belgium to obtain ironclad protections for Euroclear." The European Union Under Pressure from All Sides There is no time to lose, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "a fiscally viable and practically possible solution". "It is a decisive moment for us," states leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do next. That's why we have to succeed in a week's time". Although Russia is adamant its money should not be touched, there are further worries among European figures that the US may want to deploy Russia's blocked funds in another way, as part of its own peace initiative. Zelensky has said Ukraine is working with Europe and the US on a rebuilding fund, but he is also aware the US has been engaging with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving
Kyiv remains running out of funding to maintain its military and economy, after nearly four years of Russia's full-scale war. For Europe, the solution to filling Ukraine's funding gap of €135.7bn for the coming 24 months lies in assets belonging to Russia that are frozen held by Belgian bank Euroclear, and European Union officials aim 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 suing Euroclear in a Moscow court even before a final decision is made. 'Just' to Use Moscow's Funds, Assert Ukraine and the EU All told, Russia has approximately €210bn of its state reserves frozen in the EU, and €185bn of that is in the custody of Euroclear. European and Ukrainian authorities maintain that money should be used to reconstruct what Russia has laid waste to: The European Commission refers to it as a "loan for reparations" and has proposed a plan to bolster Ukraine's economy amounting to €90bn. "It's only fair that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that those funds then becomes Ukraine's," states Ukrainian President Volodymyr Zelensky. Chancellor Friedrich Merz argues the assets will "help Ukraine to defend itself efficiently against any future Russian attacks". Moscow's lawsuit was anticipated in Brussels. But it is not just Moscow that is concerned. The Belgian government is concerned it will be saddled with an massive bill if it all fails, and Euroclear chief executive Valérie Urbain says using the assets could "destabilise the global financial architecture". Euroclear also has an roughly €16-17bn locked in Russia. The leader of Belgium Bart de Wever has given Brussels a series of "pragmatic, fair, and legitimate conditions" before he will agree to the reconstruction loan scheme, and he has refused to rule out legal action if it "presents significant risks" for his country. Explaining the EU's Strategy? The EU is working to the wire before next Thursday's summit to come up with a solution that Belgium can support. So far the EU has held off touching the frozen capital directly but for the past year has transferred the "extraordinary revenues" from them to Ukraine. In 2024 that amounted to €3.7bn. Legally, using the profits is deemed permissible as Russia is under sanction and the returns are not property of the Russian state. But foreign defense assistance for Ukraine has slipped dramatically in 2025, and Europe has had trouble trying to cover the gap resulting from the US decision to virtually halt funding Ukraine under President Donald Trump. There are at the moment two EU proposals aimed at providing Ukraine with €90bn, to finance two-thirds of its financial requirements. The first is to secure the capital on financial markets, backed by the EU budget as a guarantee. This is Belgium's preferred option but it requires a agreement by all by EU leaders and that would be challenging when two member states are against funding Ukraine's military. The alternative is loaning Ukraine cash from the frozen Russian funds, which were initially held in bonds but have now mostly been converted into cash. That funding is owned by Euroclear held in the European Central Bank. Brussels' executive arm accepts Belgium has justified fears and claims it is convinced it has addressed them. The scheme is for Belgium to be protected with a insurance encompassing all the €210bn of Russian assets in the EU. Should Euroclear suffer a loss 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. In the event that Russia targeted Belgium itself, any decision by a Russian court would not be accepted in the EU. In a significant move, EU ambassadors are expected to agree on Friday to immobilise Russia's central bank assets held in Europe permanently. 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 expected to use an special provision under Article 122 of the EU Treaties so the assets continue to be immobilized as long as an "clear risk to the economic interests of the union" continues. The Reasons Belgium is Still Not Satisfied Brussels is firm it remains a strong supporter of Ukraine, but sees legal risks in the plan and is concerned about being shouldering the repercussions if things fail. A usually divided political landscape in this case has rallied behind Prime Minister Bart de Wever, who is under pressure from European colleagues. "Belgium is a small economy. Belgian GDP is about €565bn – think about if it would need to carry a €185bn bill," comments Veerle Colaert, expert in financial law at KU Leuven University. Although the EU might be able to secure adequate protections for the loan itself, Belgium worries about an additional danger of being vulnerable to extra legal costs. Prof Colaert also contends the stipulation for Euroclear to issue credit to the EU would contravene EU banking regulations. "Lenders need to comply with prudential rules and shouldn't concentrate risk. 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 stable. And if things go wrong it would fall to Belgium to bail out Euroclear. That's another reason why it's so important for Belgium to obtain ironclad protections for Euroclear." The European Union Under Pressure from All Sides There is no time to lose, state a group of EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They believe the frozen assets plan is "a fiscally viable and practically possible solution". "It is a decisive moment for us," states leading German conservative MP Norbert Röttgen. "If the plan collapses, I don't know what we'll do next. That's why we have to succeed in a week's time". Although Russia is adamant its money should not be touched, there are further worries among European figures that the US may want to deploy Russia's blocked funds in another way, as part of its own peace initiative. Zelensky has said Ukraine is working with Europe and the US on a rebuilding fund, but he is also aware the US has been engaging with Russia about possible partnership. A preliminary version of the US peace plan suggested $100bn of Russia's blocked funds being used by the US for reconstruction, with the US {taking|receiving