Kyiv remains running out of funding to keep going its armed forces and economy afloat, after close to 48 months of the ongoing invasion by Moscow.
From the EU's perspective, the solution to plugging Kyiv's budget hole of €135.7bn for the next two years is found in Moscow's immobilized funds held by Belgian bank Euroclear, and EU leaders hope to sign that off at their Brussels summit next week.
Russian officials warn the EU plan would be an confiscation, and Moscow's monetary authority declared on Friday it was suing Euroclear in a Moscow court prior to a final decision is made.
'Just' to Utilize Moscow's Assets, Assert European and Ukrainian Officials
All told, Russia has about €210bn of its state reserves immobilized in the EU, and €185bn of that is held by Euroclear.
The EU and Ukraine contend that those funds should be used to rebuild what Russia has laid waste to: The European Commission refers to it as a "reparations loan" and has devised a plan to support Ukraine's economy to the tune of €90bn.
"It is appropriate that the assets frozen from Russia should be used to reconstruct what Russia has destroyed – and that those funds then becomes Ukraine's," remarks Ukrainian President Volodymyr Zelensky.
Chancellor Friedrich Merz states the assets will "allow Ukraine to protect itself effectively against any future Russian attacks".
The legal move by Moscow was foreseen in Brussels. But it is not just Moscow that is concerned.
Authorities in Brussels is worried it will be burdened by an huge bill if it all backfires, and Euroclear CEO Valérie Urbain argues using the assets could "undermine the global financial architecture".
Euroclear also has an roughly €16-17bn frozen 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 reparations plan, and he has not excluded legal action if it "presents significant risks" for his country.
What is the EU's Strategy?
The EU is under pressure prior to next Thursday's summit to finalize a arrangement that Belgium can agree to.
So far the EU has avoided using the frozen capital directly but starting in 2024 has paid the "excess income" from them to Ukraine. In 2024 that was €3.7bn. Legally, using the revenue is considered less risky as Russia is subject to sanctions and the proceeds are not Russian sovereign property.
But international military aid for Ukraine has declined sharply in 2025, and Europe has had trouble trying to make up the deficit caused by the US decision to virtually halt funding Ukraine under President Donald Trump.
There are currently two EU options aimed at providing Ukraine with €90bn, to pay for a large portion of its budgetary necessities.
- Option one is to raise the money on the markets, backed by the EU budget as a collateral. This is Belgium's preferred option but it requires a unanimous vote by EU leaders and that would be difficult when two member states are against funding Ukraine's military.
- The alternative is loaning Ukraine cash from the Russian assets, which were at first held in financial instruments but have now largely turned into cash. That capital is an asset of Euroclear located within the European Central Bank.
The EU's executive accepts Belgium has justified fears and states it is confident it has addressed them.
The proposal is for Belgium to be protected with a insurance applying to 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.
Should Russia took legal action against Belgium itself, any ruling by a Russian court would not be accepted in the EU.
In a key development, EU ambassadors are poised to endorse on Friday to permanently block Russia's central bank assets held in Europe permanently.
Until now they have had to vote unanimously every six months to renew the freeze, which could have meant a ongoing risk to Belgium.
The EU ambassadors are expected to use an emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an "clear risk to the financial well-being of the union" continues.
The Reasons Belgium is Still Not Satisfied
Brussels is firm it remains a committed partner of Ukraine, but identifies juridical dangers in the plan and is concerned about being shouldering the fallout if things go wrong.
A typically divided political landscape in this case has united behind Prime Minister Bart de Wever, who is under pressure from European colleagues.
"Belgium has a modest-sized economy. Belgian GDP is around €565bn – think about if it would need to shoulder a €185bn bill," says Veerle Colaert, professor of financial law at KU Leuven University.
Although the EU might be able to obtain enough protections for the loan itself, Belgium fears an additional danger of being subject to extra fines or liabilities.
Prof Colaert also contends the requirement for Euroclear to provide a loan to the EU would contravene EU banking regulations.
"Banks need to comply with capital and liquidity requirements and shouldn't make one enormous loan. Now the EU is asking Euroclear to do just that.
"Why do we have these banking laws? It's because we want banks to be solvent. And if things go wrong it would be up to Belgium to rescue Euroclear. That's an additional reason why it's so important for Belgium to obtain absolute guarantees for Euroclear."
Europe Under Pressure from Multiple Fronts
There is no time to lose, state seven EU member states including those neighboring Russia such as the Baltics, Finland and Poland. They argue the frozen assets plan is "the financially feasible and politically achievable solution".
"It is a decisive moment for us," warns leading German conservative MP Norbert Röttgen. "If the plan collapses, 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 used, there are added concerns among EU officials that the US may want to employ Russia's immobilized billions differently, as part of its own diplomatic proposal.
Zelensky has said Ukraine is in discussions with Europe and the US on a rebuilding fund, but he is also mindful the US has been talking to Russia about possible partnership.
A preliminary version of the US peace plan mentioned $100bn of Russia's immobilized capital being used by the US for reconstruction, with the US {taking|receiving
