European Union governments have reached an agreement to keep Russian assets frozen indefinitely, a move that could allow the funds to be used for loans aimed at helping Ukraine cope with its growing financial and military needs.
The frozen funds, totaling up to €210bn, have been held in the EU since Russia launched its large-scale invasion of Ukraine in February 2022. Most of the money is stored at Belgium’s Euroclear, and EU leaders hope to finalise a plan at next week’s summit that would channel the money to Ukraine to sustain its economy and defence operations.
Ukraine estimates it will need about €135.7bn over the next two years to continue functioning and maintain its military strength. While Europe intends to cover roughly two-thirds of this, international support has slowed sharply in 2025 after the United States reduced funding, leaving Kyiv under increasing financial strain.
Russia has strongly opposed the plan, accusing the EU of seizing its assets. In response, the Russian central bank announced it would take legal action against Euroclear in Moscow on Friday.
The bulk of Russia’s frozen money, around €185bn, is held by Euroclear. EU officials and Kyiv argue that these funds should be used to repair the destruction caused by the war, describing the effort as a form of war reparations. The European Commission has suggested using the money to support a loan package of €90bn to Ukraine.
"It's only fair that Russia's frozen assets should be used to rebuild what Russia has destroyed – and that money then becomes ours," says Ukraine's Volodymyr Zelensky.
German Chancellor Friedrich Merz adds that the assets will "enable Ukraine to protect itself effectively against future Russian attacks."
The EU says Moscow’s legal challenges were anticipated. European Economic Commissioner Valdis Dombrovskis assured that EU financial institutions are “fully protected” from any legal claims tied to the plan.
Belgium, however, has raised concerns about potential financial and legal repercussions. Euroclear chief executive Valérie Urbain warned that using the frozen funds could “destabilise the international financial system,” noting that Euroclear also has roughly €16-17bn of its own assets blocked in Russia.
Belgian Prime Minister Bart De Wever has demanded “rational, reasonable, and justified conditions” before backing the plan, while leaving open the possibility of legal action if Belgium faces risks.
Until now, the EU has only used the interest earned from the frozen assets, sending €3.7bn to Ukraine in 2024. This method has been viewed as legally safe because the funds are not treated as Russian sovereign property under sanctions.
With funding pressures increasing, the EU is considering two options to deliver the €90bn needed by Ukraine. One is borrowing from capital markets backed by the EU budget, Belgium’s preferred method, though it requires unanimous approval—a difficult hurdle given Hungary and Slovakia’s resistance to military funding.
The alternative is to loan Ukraine money directly from Russia’s frozen assets, which were initially in securities and have largely matured into cash. These assets are held by Euroclear under the European Central Bank.
EU officials say they have addressed Belgium’s concerns. Under the proposed arrangement, Belgium would receive a guarantee covering the entire €210bn, and any potential losses by Euroclear in Russia would be offset using Russian clearing house assets held within the EU.
Any ruling by a Russian court against Belgium would not be recognised within the EU.
In a major move, EU ambassadors agreed to an indefinite freeze on Russia’s central bank assets in Europe. Previously, the freeze had to be renewed every six months, creating repeated risks for Belgium.
The decision relied on an emergency clause under Article 122 of the EU treaties, allowing the freeze to continue as long as an “immediate threat to the economic interests of the union” remains, or until Russia pays full war reparations to Ukraine.
Swedish Finance Minister Elisabeth Svantesson said the indefinite freeze is “an important step in enabling more support for Ukraine and protecting our democracy.”
Despite this, Belgium remains cautious. It continues to stand as a strong ally of Ukraine but fears potential legal and financial exposure if the plan fails.
“Very important decisions” are expected in the coming week, De Wever said after meeting UK Prime Minister Sir Keir Starmer in London, adding that Belgium and the UK are working together to ensure they can support Ukraine as a free, democratic, and sovereign nation.
Experts warn of the scale of the risks involved. Veerle Colaert, professor of financial law at KU Leuven University, said Belgium’s economy is relatively small.
“Belgium is a small economy. Belgian GDP is about €565bn – imagine if it would need to shoulder a €185bn bill,” she said.
Colaert also noted that forcing Euroclear to grant a loan could breach EU banking regulations.
“Banks need to comply with capital and liquidity requirements and shouldn't put all their eggs in one basket. Now the EU is telling Euroclear to do just that.
Why do we have 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 secure water-tight guarantees for Euroclear.”
Several EU states, particularly those near Russia, have urged speedy action, arguing the frozen assets plan is the most practical and realistic approach.
"It's a matter of destiny for us," says German 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."
There are also concerns that the United States may seek to use Russia’s frozen funds differently as part of a potential peace plan. Zelensky confirmed ongoing discussions with Europe and the US on reconstruction, even as Washington negotiates with Moscow.
An early US draft proposal suggested using $100bn of Russia’s frozen assets for reconstruction, splitting profits between the US and Europe, with the remainder directed toward joint US-Russia projects.
EU sources say the indefinite freeze makes it much harder for other actors to claim the funds. Any alternative proposal would now require approval from a majority of EU member states, carrying significant financial consequences.
Hungary’s Viktor Orban criticised the EU move, saying leaders were “placing themselves above the rules” and replacing legal processes with bureaucratic decisions.
