Russia Cautions: Potential Risks Ahead

Russia is warning the European Union and Belgium against using its frozen assets to fund Ukraine, calling it theft. But EU Commission President Ursula von der Leyen says the financing plan doesn't amount to confiscation because the money would be structured as a loan that Ukraine only has to repay if Russia doesn't pay war reparations.

The situation got more complicated after a separate 28-point peace plan backed by the United States emerged. This alternative proposal suggests using some of the frozen Russian assets in a joint US-Russia investment vehicle to help end the war in Ukraine.

But von der Leyen isn't backing down. She told US Treasury Secretary Scott Bessent about her plan to move forward with the reparations loan and says it was "welcomed" by the American side.

Here's how the EU voting works: The bloc can push ahead with the plan if 15 out of 27 member countries vote in favor, as long as those countries represent at least 65% of the EU's population.

This puts the EU in a tricky spot. On one hand, they want to support Ukraine financially without technically seizing Russian assets outright. On the other hand, Russia sees any use of its frozen money as outright theft, regardless of the legal structure.

The timing matters too. With a new US administration and competing peace proposals on the table, European leaders are trying to balance supporting Ukraine while keeping diplomatic options open. The loan structure gives them some legal cover, but it's still using Russian money that Moscow can't access.

For financial markets, this creates uncertainty about how frozen assets might be handled in future conflicts. The precedent could affect how countries view holding reserves in Western financial systems.