Ukraine is depleting its funding to maintain its military and economy, after nearly four years of full-scale conflict with Russia.
For Europe, the solution to addressing Ukraine's budget hole of €135.7bn for the next two years rests with Moscow's immobilized funds sitting in Belgian bank Euroclear, and Brussels aim to sign that off at their EU leaders' conference next week.
Moscow's representatives warn the EU plan would be an act of theft, and Russia's central bank declared on Friday it was suing Euroclear in a Moscow court even before a definitive agreement is made.
In total, Russia has approximately €210bn of its state reserves blocked in the EU, and €185bn of that is held by Euroclear.
European and Ukrainian authorities maintain that those funds should be used to restore what Russia has laid waste to: Brussels terms it a "loan for reparations" and has devised a plan to bolster Ukraine's economy to the tune of €90bn.
"It is appropriate that Moscow's blocked funds should be used to rebuild what Russia has destroyed – and that money then becomes ours," remarks Ukrainian President Volodymyr Zelensky.
German Chancellor Friedrich Merz states the assets will "allow Ukraine to protect itself effectively against subsequent Russian attacks".
The legal move by Moscow was expected in Brussels. But it is not only Moscow that is dissatisfied.
The Belgian government is concerned it will be burdened by an enormous bill if it all fails, and Euroclear CEO Valérie Urbain argues using the assets could "disrupt the global financial architecture".
Euroclear also has an approximate €16-17bn locked in Russia.
The leader of Belgium Bart de Wever has set the EU a series of "logical, sensible, and warranted conditions" before he will accept the reparations plan, and he has left open the possibility of legal action if it "carries significant risks" for his country.
The EU is under pressure before next Thursday's summit to agree on a arrangement that Belgium can accept.
So far the EU has held off accessing the principal funds directly but starting in 2024 has directed the "windfall profits" from them to Ukraine. In 2024 that totaled €3.7bn. Juridically, using the revenue is deemed less risky as Russia is under sanction and the earnings are not Russian sovereign property.
But global military support for Ukraine has fallen significantly in 2025, and Europe has found it difficult to cover the gap left by the US decision to virtually halt funding Ukraine under President Donald Trump.
There are currently two EU options designed to furnishing Ukraine with €90bn, to finance a majority of its budgetary necessities.
The EU's executive recognizes Belgium has justified fears and claims it is confident it has resolved them.
The scheme is for Belgium to be safeguarded with a insurance encompassing all the €210bn of Russian assets in the EU.
Should Euroclear face a financial hit of its own assets in Russia, that would be offset from assets belonging to Russia's own settlement agency which are in the EU.
If Russia targeted Belgium itself, any decision by a Russian court would not be enforced in the EU.
As an important step, EU ambassadors are poised to endorse on Friday to immobilise Russia's central bank assets held in Europe for the foreseeable future.
Previously they have had to vote unanimously every six months to extend the freeze, which could have meant a constant risk to Belgium.
The EU ambassadors are expected to use an special provision under Article 122 of the EU Treaties so the assets stay blocked as long as an "immediate threat to the financial well-being of the union" continues.
Belgium is adamant it remains a committed partner of Ukraine, but sees regulatory pitfalls in the plan and is concerned about being forced to deal with the fallout 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 has a modest-sized economy. Belgian GDP is around €565bn – consider if it would need to shoulder a €185bn bill," notes Veerle Colaert, expert in financial law at KU Leuven University.
While the EU might be able to arrange sufficient assurances for the loan itself, Belgium worries about an additional danger of being vulnerable to extra fines or liabilities.
Prof Colaert also believes the demand for Euroclear to grant a loan to the EU would violate EU banking regulations.
"Financial institutions need to adhere to prudential rules and shouldn't concentrate risk. Now the EU is instructing Euroclear to do precisely that.
"Why do we have these financial regulations? It's because we want banks to be stable. And if things turn sour it would be up to Belgium to bail out Euroclear. That's another reason why it's so vital for Belgium to get water-tight protections for Euroclear."
The situation is urgent, warn several EU member states including those closest to Russia such as the Baltics, Finland and Poland. They argue the scheme involving immobilized capital is "the most financially feasible and politically realistic solution".
"It's a matter of destiny for us," warns leading German conservative MP Norbert Röttgen. "Should we not succeed, I don't know what we'll do next. That's why we have to succeed in a week's time".
While Russia is insistent its money should not be used, there are added concerns among European figures that the US may want to deploy Russia's frozen billions for another purpose, as part of its own diplomatic proposal.
Zelensky has stated Ukraine is working with Europe and the US on a recovery fund, but he is also mindful the US has been talking to Russia about future co-operation.
An initial document of the US peace plan referred to $100bn of Russia's frozen assets being used by the US for reconstruction, with the US {taking|receiving
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