Russia Strikes Back as Europe Moves to Use Frozen Assets for Ukraine
Russia has launched a major legal challenge in response to Europe’s proposal to use Moscow’s frozen assets to fund Ukraine’s war-damaged economy and defence needs. The Russian Central Bank is suing Belgium’s Euroclear in a Moscow court, calling the EU’s move “theft” and a violation of international financial norms.
Ukraine, meanwhile, is facing a critical cash crisis nearly four years into the full-scale war.
Europe’s Plan: Turn Frozen Russian Funds into a Lifeline for Kyiv
EU leaders believe the solution lies in the massive pool of Russian assets frozen shortly after the 2022 invasion.
- €210bn frozen across Europe
- €185bn held by Euroclear alone
Brussels is pushing a “reparations loan” worth €90bn to support Ukraine’s budget over the next two years.
Ukrainian President Volodymyr Zelensky argues it is “only fair” that Russia’s frozen funds be used to rebuild the infrastructure its military destroyed. German Chancellor Friedrich Merz also supports the plan, saying it would boost Ukraine’s security against future Russian attacks.
Belgium Raises Alarm Over Financial and Legal Risks
Belgium—where Euroclear is headquartered—is increasingly uneasy. Officials fear the plan could expose the country to billions in losses or retaliatory penalties from Moscow.
Key concerns include:
- Possible destabilisation of the international financial system
- Potential violation of EU banking rules requiring diversification
- Belgium’s economy being vulnerable to a massive liability
Belgian Prime Minister Bart de Wever insists he supports Ukraine, but only under “rational and justified” conditions that protect Belgium from becoming the EU’s financial scapegoat.
Why Europe Is Under Pressure
With U.S. support for Ukraine sharply declining since 2025, European states face growing urgency to fill the funding gap. Several EU countries—including the Baltics, Finland, and Poland—argue that using frozen Russian assets is the most realistic option.
At the same time, there are concerns that the U.S. may push for alternative uses of Russia’s frozen wealth as part of a long-term peace blueprint, including joint U.S.–Russia investment projects.
The EU's Counter-Strategy
To ease Belgium’s fears, the EU is preparing:
- A full guarantee covering the entire €210bn in frozen assets
- A mechanism to offset any Euroclear losses with Russian clearing-house assets held in Europe
- A move to immobilise Russia’s central bank assets indefinitely, reducing political risk and preventing any future challenge that could unfreeze them
EU officials say these steps will prevent Belgium from bearing unfair legal burdens and make the plan more resilient against geopolitical shifts.
A Critical Week Ahead
As the Brussels summit approaches, Europe must convince Belgium—or risk the collapse of the entire financial strategy. Analysts warn that failure to secure the deal could cripple Ukraine’s economy and signal weakness to Russia.