EU moves to freeze Russian assets indefinitely as Moscow sues Euroclear

The European Union took a major step on Monday toward indefinitely freezing Russian sovereign assets held in the bloc, after ambassadors triggered a written procedure under Article 122 that removes the risk of a veto from Hungary or another member state. Just hours after the move opened the way for a reparations loan to Ukraine, the Russian Central Bank announced it was suing Euroclear in response to EU plans to use frozen Russian assets as the basis for such financing, EUalive’s partner Suspilne writes.

According to a press release issued by the Russian regulator, the claim for “damages caused to the Bank of Russia” will be filed before the Moscow Arbitration Court. The regulator argues that Euroclear’s actions resulted in financial harm due to the “inability to dispose of funds and securities belonging to the Bank of Russia”.

Since the start of Russia’s full-scale invasion of Ukraine, foreign jurisdictions have identified nearly €280 billion in frozen Russian central bank reserves, more than two-thirds of which are held in the EU. The Belgian depository Euroclear holds around €191 billion, according to its financial report referenced by Financial Times.

Article 122 clears the legal path for a long-term freeze

The Danish presidency of the EU Council confirmed that invoking Article 122 of the Treaty on the Functioning of the European Union would allow member states to maintain the freeze “for a longer period of time” instead of renewing it every six months. With the threat of a veto removed, EU institutions can now rely on these immobilised funds as the foundation for a medium-term financial instrument to support Ukraine.

Article 122 allows the bloc to adopt crisis-related economic decisions by qualified majority rather than unanimity, providing a legal basis for exceptional measures such as the indefinite freezing of Russian assets.

The written procedure is set to conclude on the evening of 12 December, paving the way for the Council to formally adopt the decision. Work on the broader financing package for Ukraine’s needs in 2026-2027 is expected to continue in the coming days.

On 3 December, the European Commission published two decisions aimed at supporting Kyiv over that period: EU-level borrowing and a reparations loan based on the financial flows generated by immobilised Russian assets.

How the reparations loan would work

Commission President Ursula von der Leyen first presented the idea on 10 September. The loan would rely on the remaining cash balances derived from Russian sovereign assets held in Western jurisdictions. Of the approximately €210 billion held in Europe, €175 billion has already been converted into cash within Euroclear – a sum that could serve as the basis for the new mechanism.

Before the reparations loan is issued, the EU intends to ensure repayment of a €45 billion G7 loan package agreed last year, leaving around €130 billion available for the new instrument. According to Economy Commissioner Valdis Dombrovskis, the precise amount will depend on an upcoming assessment by the International Monetary Fund. EU officials told Reuters that the loan could reach up to €130 billion.

Diplomats have been discussing the use of frozen Russian assets for months. On 23 October, the EU was set to debate the issue again, attempting to secure unanimity despite Hungary’s opposition. The Commission had already prepared the legal instrument in late September, with EU leaders holding an initial discussion in Copenhagen on 1 October.

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Belgium raises the alarm

Belgium, home to Euroclear, has consistently warned that it could be left carrying disproportionate legal and financial risks due to the concentration of Russian assets in the Brussels-based institution. Belgian authorities insist that the EU must fully study the legal and judicial implications of any use of these funds. EU foreign policy chief Maia Kallas agreed, saying the Union is ready to develop a mechanism that provides Belgium with the “necessary security”.

Belgian Prime Minister Bart de Wever expanded on these concerns in a letter to von der Leyen. He argued that the scheme is “fundamentally wrong” and could harm Euroclear’s reputation while placing Belgium in a uniquely vulnerable position. “It would be unfair and dishonest to expect that, while the benefits of such a scheme would be for everyone, the costs and risks would be borne by Belgium,” he wrote.

De Wever criticised what he described as EU leaders’ “complete lack of understanding” of the financial risks. He noted that the Commission has not yet presented a draft legal text and that recent options papers do not reflect Belgian concerns. The plan, he warned, could prompt investors to withdraw funds from Euroclear or sell EU bonds, raising “systemic risks” and potentially destabilising the euro.

De Wever further argued that pushing ahead could undermine prospects for a future settlement to end Russia’s war against Ukraine. “Moving forward with the proposed reparations loan scheme will have the side effect of us as the EU effectively obstructing the achievement of a possible peace agreement,” he warned.

Under von der Leyen’s proposal, the frozen Russian central bank assets in Europe would be lent to Ukraine for defence and routine budget support. The loan would not involve confiscation, and repayment would occur only if Moscow pays war reparations to Kyiv.

Belgium maintains that any new mechanism must include collective EU guarantees, sharing of legal risks, and participation by other Western countries holding Russian assets.

Caption: The Euroclear group headquarters in Brussels, Belgium, 5 December 2025. The German Chancellor, Belgian Prime Minister, and European Commission President will meet in Brussels to discuss the EU’s proposal to use frozen Russian assets to fund Ukraine, as well as financial and judicial guarantees for Belgium. EPA/OLIVIER MATTHYS