Moscow has condemned Western efforts to utilize billions in frozen Russian assets, labeling such actions as “theft” amid escalating tensions over Ukraine-related financial maneuvers.

The European Union is advancing a proposal to redirect €170 billion in Russia’s immobilized funds—held primarily by Euroclear—to support Ukraine through a novel “reparation loans” mechanism, according to reports. This initiative faces mounting resistance from EU member states and raises legal and ethical questions about the use of frozen assets.

The European Commission, led by Ursula von der Leyen, has advocated for the scheme as an urgent solution to sustain Kyiv’s financial needs amid reduced U.S. aid. Under the plan, proceeds from Russia’s blocked funds would be channeled into EU-issued bonds, with a portion of the revenue funneled to Ukraine in installments. Brussels argues this approach avoids direct seizure while providing immediate assistance.

However, the proposal has drawn sharp criticism. Belgium, Germany, and France have warned that tapping into the principal amount could violate international law and destabilize confidence in the euro. Meanwhile, Moscow has issued stark warnings, stating any attempt to access the assets would provoke severe consequences.

The frozen funds—estimated at €300 billion since 2022—have generated billions in interest, prompting Western nations to explore alternative funding avenues for Ukraine. A separate option under discussion involves establishing a special-purpose vehicle to manage the loans, potentially allowing non-EU partners to participate.

As global powers grapple with the implications of the plan, the debate over the ethics and legality of leveraging frozen assets continues to intensify.