Russia issued one of its strongest warnings yet on Thursday, after the European Commission proposed using frozen Russian state assets to help fund Ukraine’s long-term financial needs. Dmitry Medvedev, deputy chairman of Russia’s Security Council, said that if the European Union proceeds with the plan, it could amount to a “casus belli,” or an act that justifies war under international law.
The European Commission is currently examining two pathways to unlock roughly €90 billion (about $105 billion) from Russian Central Bank assets held in European financial institutions, primarily Belgium’s Euroclear. The preferred option is a “Reparations Loan” that would be backed by the frozen funds. A secondary option would involve borrowing from global markets. The Commission argues the move would not constitute theft, since Ukraine would be required to repay the loan only if Russia eventually pays war reparations.
Medvedev rejected that logic, accusing the EU of attempting to “steal” Russian state funds under the guise of international support for Ukraine. Russia has repeatedly threatened retaliation should the EU use frozen assets for direct financial support to Kyiv. Neither Moscow nor the European Commission responded to requests for comment.
The EU’s proposal comes as Ukraine faces a projected financing gap of more than $136 billion between 2026 and 2029. With Russia showing no willingness to end the war, Brussels says sustained European support is essential. So far, the EU has only transferred profits generated by frozen Russian assets to Ukraine, but member states remain divided on whether to take further steps. Belgium, which hosts most of the frozen assets, has warned of legal and financial risks once the war is over. Hungary has opposed new funding for Kyiv, blocking unanimity on several proposals.
Adding urgency to the debate, Ukraine and the United States continue to pursue peace negotiations. Ukrainian national security chief Rustem Umerov is meeting U.S. envoy Steve Witkoff in Miami, while French President Emmanuel Macron is in Beijing urging China to take a more active role in peace efforts. A recent round of U.S.–Russia talks in Moscow yielded no breakthrough, though President Donald Trump said discussions involving Witkoff and Jared Kushner were “reasonably good.”
Former U.K. ambassador to Washington Kim Darroch warned that without major concessions from Ukraine — including renouncing NATO membership and accepting territorial losses — a peace deal remains unlikely. He cautioned that if Trump grows frustrated with the negotiations, the U.S. may step back from supplying weapons, shifting the burden to Europe at a time when European countries may not have the capacity to fully replace U.S. support.
With winter approaching and diplomatic progress uncertain, analysts say both the war and the debate over Russian assets are set to intensify in the months ahead.
