EU heavyweight Italy joins Belgium in opposing Russian frozen assets plan

BRUSSELS — Italy is throwing its weight behind Belgium in opposing the EU’s plan to send €210 billion of Russia’s frozen state assets to Ukraine, according to an internal document seen by POLITICO.

The intervention by Rome, the EU’s No.3 in terms of population and voting power — less than a week before a crucial meeting of EU leaders in Brussels — undermines the European Commission’s hopes of finalizing a deal on the plan.

The Commission is pushing for EU member countries to reach an agreement in a European Council summit on Dec.18-19 so that the billions of euros in Russian reserves held in the Euroclear bank in Belgium can be freed up to support Kyiv’s war-battered economy. 

Belgium’s government is holding out over fears it will be on the hook to repay the full amount if Russia claws back the money, but has so far lacked a heavyweight ally ahead of the December summit.

Now Italy has shaken up the diplomatic dynamics by drafting a document with Belgium, Malta and Bulgaria urging the Commission to explore alternative options to using the Russian assets to keep Ukraine afloat over the coming years.

The four 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.”

The four countries are referring to a Plan B to issue joint EU debt to finance Ukraine over the coming years.

However, this idea has its own problems. Critics note it will add to the high debt burdens of Italy and France, and requires unanimity — meaning it can be vetoed by Hungary’s Kremlin-friendly Prime Minister Viktor Orbán.

The four countries — even if joined by pro-Kremlin Hungary and Slovakia — would not be able to build a blocking minority but their public criticism erodes the Commission’s hopes of striking a political deal next week.

While Italy’s right-wing Prime Minister Giorgia Meloni has always supported sanctions against Russia, the government coalition she leads is divided over supporting Ukraine.

Hard-right Deputy Prime Minister Matteo Salvini has embraced a Russia-friendly stance and endorsed U.S. President Donald Trump’s plan to end the war in Ukraine.

Emergency rule

Offering a further criticism, the four countries expressed skepticism toward the Commission seizing on emergency powers to overhaul the current sanctions rules and keep Russia’s assets frozen in the long-term.

Despite voting in favor of this move to preserve EU unity, they said they were wary of then progressing to use the Russian 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 four countries wrote.

The legal mechanism for long-term freeze is meant to reduce the chance that pro-Kremlin countries in Europe, such as Hungary and Slovakia, will hand back the frozen funds to Russia.

Officials claim this workaround undermines the Kremlin’s chances of liberating its assets as part of a post-war peace settlement — and therefore strengthens the EU’s separate plan to make use of that money.  

However, the four countries wrote that the legal clause “implies very far reaching legal, financial, procedural, and institutional consequences that might go well beyond this specific case.”

Giovanna Faggionato contributed reporting.