Russia has strongly condemned the plan of the European Union governments to immobilise indefinitely €210bn (£185bn) of Russian assets frozen in the EU since the start of Russia’s full-scale invasion of Ukraine in February 2022. Most of the funds are held by Belgian bank Euroclear, and European leaders hope to use the money to provide a loan to help Kyiv finance its military and economic needs.
The Russian Central Bank announced it is suing Euroclear in Moscow, challenging the legality of using Moscow’s frozen funds for Ukraine. Officials in Moscow have accused the EU of theft, warning that the move is unlawful and that any attempt to repurpose the assets undermines international financial norms.
Ukraine, after nearly four years of war, is estimated to require €135.7bn (£119bn; $159bn) over the next two years to sustain its defence and recovery efforts. Europe aims to cover roughly two-thirds of that sum.
The EU and Ukraine argue that the frozen assets, which were seized days after the invasion, should be repurposed as reparations to rebuild what Russia has destroyed. Ukrainian President Volodymyr Zelensky said “it’s only fair that Russia’s frozen assets should be used to rebuild what Russia has destroyed – and that money then becomes ours,” while German Chancellor Friedrich Merz said the funds would enable Ukraine to defend itself against further Russian attacks. European financial institutions, officials emphasised, are legally protected from Russian court action.
Belgium has expressed concern over the potential risks, warning it could be left with enormous liabilities if the plan falters. Euroclear’s chief executive, Valérie Urbain, cautioned that using the assets could destabilise the international financial system, particularly as Euroclear also holds €16-17bn in Russian assets. Belgian Prime Minister Bart De Wever has set the EU a series of “rational, reasonable, and justified conditions” before he will accept the reparations plan, and he has refused to rule out legal action if it “poses significant risks” for his country.
Until now, the EU has limited the use of the frozen assets to paying “windfall profits” to Ukraine, which totalled €3.7bn in 2024. Full deployment of the funds, however, has become urgent as international military aid to Ukraine has declined in 2025, partly due to the US sharply reducing funding under President Donald Trump. The EU is working to the wire ahead of next Thursday’s summit to come up with a solution that Belgium can accept.
Two main EU proposals aim to provide Ukraine with €90bn, covering about two-thirds of its immediate funding needs. One option, preferred by Belgium, is raising the money on capital markets backed by the EU budget. This is Belgium’s preferred option but it requires a unanimous vote by EU leaders and that would be difficult when Hungary and Slovakia object to funding Ukraine’s military. The other involves a loan from Russia’s frozen assets, which have largely matured into cash held by Euroclear via the European Central Bank.
The EU’s executive, the European Commission, accepts Belgium has legitimate concerns and says it is confident it has dealt with them. The plan is for Belgium to be protected with a guarantee covering all the €210bn of Russian assets in the EU. Should Euroclear suffer a loss of its own assets in Russia, a Commission source explained 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 recognised in the EU.
In a key development, EU ambassadors agreed to immobilise Russia’s central bank assets indefinitely, removing the previous six-month renewal requirement and reducing the risk to Belgium. The EU ambassadors used an emergency clause under Article 122 of the EU Treaties so the assets remain frozen as long as an “immediate threat to the economic interests of the union” continues, or until Russia pays war reparations to Ukraine in full.
Swedish Finance Minister Elisabeth Svantesson said the decision was an “important step in enabling more support for Ukraine and protecting our democracy”.
While Belgium maintains its commitment to supporting Ukraine, it remains wary of assuming excessive financial risk. Experts note that forcing Euroclear to provide the loan could violate banking regulations and potentially destabilise Belgium’s economy, which has a GDP of approximately €565bn.
Despite opposition from some EU members, including Hungary and Slovakia, seven countries close to Russia, including the Baltic states, Finland, and Poland, have stressed that using the frozen assets is the most viable financial solution. German MP Norbert Röttgen warned that failure to act would leave Europe with few alternatives.
“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 succeed in a week’s time”.
Concerns also linger over potential US plans to repurpose some of Russia’s frozen funds. Early drafts of a US peace plan reportedly propose using $100bn of the assets for reconstruction, with profits split between the US and Europe. The EU’s move to immobilise the funds indefinitely could complicate such proposals, requiring US negotiators to secure a majority of EU member states to access the money.
Hungarian Prime Minister Viktor Orban criticised the plan, arguing that EU leaders are “placing themselves above the rules” and replacing the rule of law with bureaucratic discretion.
As EU leaders prepare for next week’s summit, the decision to immobilise Russia’s assets indefinitely is expected to be a critical step in ensuring Ukraine receives the financial support necessary to sustain its war effort and post-war recovery.
Melissa Enoch
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