EU to Use Profits From Frozen Russian Assets to Help Ukraine

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European Union nations have decided to approve an outline deal that would keep in reserve the profits from hundreds of billions of dollars in Russian central bank assets that have been frozen in retaliation for Moscow's war in Ukraine, an EU official said.

The tentative agreement, reached late Monday, still needs formal approval but is seen as a first step toward using some of the 200 billion euros ($216 billion) in Russian central bank assets in the EU to help Ukraine rebuild from Russian destruction.

The official, who asked not to be identified since the agreement was not yet legally ratified, said the bloc "would allow to start collecting the extraordinary revenues generated from the frozen assets ... to support the reconstruction of Ukraine."

How the proceeds will be used will be decided later, as the issue remains mired in legal and practical considerations.

There is urgency since Ukraine is struggling to make ends meet, and aid plans in the EU and the United States are being held back over political considerations including whether allies will continue helping Ukraine at the same pace as they did in the first two years of the war.

EU leaders will meet on Thursday hoping to approve a 50 billion euro ($54 billion) support package for Ukraine over the solitary opposition of Hungarian Prime Minister Viktor Orban.

Even if using the unfrozen assets, which now go untapped, seems like a practical step to take, many fear that financial weaponization could harm the standing of the EU in global financial markets.

Early this month, Ukrainian President Volodymyr Zelenskyy called for a "strong" decision this year for the frozen assets in Western banks to "be directed towards defense against the Russian war and for reconstruction" of Ukraine.

The EU step late Monday paves the way if EU nations ever want to impose such measures. Group of Seven allies of Ukraine are still looking for an adequate legal framework to pursue the plan.