Italy shakes up EU talks by opposing use of Russian assets for Ukraine aid

Italy has aligned itself with Belgium in opposing the European Union’s proposal to channel €210 billion in frozen Russian state assets to Ukraine, according to an internal document obtained by POLITICO, dealing a setback to the European Commission just days before a pivotal summit of EU leaders in Brussels.

Rome’s move is significant. As the EU’s third-largest member state by population and voting weight, Italy’s intervention — less than a week ahead of the December 18–19 European Council meeting — weakens the Commission’s push to secure political backing for the plan. The proposal aims to unlock billions of euros in Russian reserves held at Belgium-based clearing house Euroclear and redirect them to support Ukraine’s war-ravaged economy.

Belgium has so far resisted the initiative out of concern that it could ultimately be liable to repay the full sum if Russia were to reclaim the assets through legal action. Until now, Brussels had struggled to find a major ally willing to publicly share those concerns ahead of the summit.

That dynamic has now shifted. Italy has joined Belgium, Malta and Bulgaria in drafting a joint document urging the Commission to examine alternative ways of financing Ukraine, rather than relying on the direct use of frozen Russian assets. The four countries called on EU institutions to pursue options that comply with EU and international law, involve more predictable parameters and carry significantly lower legal and financial risks.

In their text, the countries said they “invite the Commission and the Council to continue exploring and discussing alternative options in line with EU and international law, with predictable parameters, presenting significantly less risks, to address Ukraine’s financial needs, based on an EU loan facility or bridge solutions.” In practice, this points to a fallback plan involving the issuance of joint EU debt to fund Ukraine in the coming years.

That approach, however, is far from straightforward. Critics argue that additional joint borrowing would further strain the already high debt levels of countries such as Italy and France. It would also require unanimous approval, giving Hungary’s Kremlin-friendly Prime Minister Viktor Orbán an effective veto.

Even if Italy, Belgium, Malta and Bulgaria were joined by Hungary and Slovakia, the group would still fall short of a formal blocking minority. Nevertheless, their public objections significantly dent the Commission’s chances of clinching a political agreement at next week’s summit.

The episode also highlights political tensions within Italy itself. While Prime Minister Giorgia Meloni has consistently backed sanctions against Russia, her governing coalition remains divided over the level of support for Ukraine. Deputy Prime Minister Matteo Salvini, who leads the hard-right League party, has taken a more Russia-friendly stance and has openly endorsed US President Donald Trump’s proposal to end the war in Ukraine.

Beyond financing options, the four countries also voiced reservations about the Commission’s plan to rely on emergency powers to overhaul existing sanctions rules in order to keep Russian assets frozen over the long term. Although they ultimately voted in favour of extending the freeze to preserve EU unity, they stressed that this should not be interpreted as consent to using the assets themselves.

“This vote does not pre-empt in any circumstances the decision on the possible use of Russian immobilised assets that needs to be taken at Leaders’ level,” the document states.

The proposed legal mechanism for a long-term freeze is intended to prevent pro-Kremlin governments in Europe, notably Hungary and Slovakia, from unilaterally returning the funds to Russia. EU officials argue that this workaround reduces Moscow’s ability to reclaim its assets in the context of a future peace settlement, thereby reinforcing the EU’s broader strategy to eventually tap the funds for Ukraine.

However, Italy and its partners warned that the legal clause underpinning the move could have sweeping implications. They cautioned that it “implies very far-reaching legal, financial, procedural, and institutional consequences that might go well beyond this specific case,” signalling deep unease over setting a precedent that could reshape EU sanctions policy well into the future.

By Tamilla Hasanova