EU-RUSSIA: Council Approves Use Of Russian Windfall Profits For Ukraine

The European Council has formally approved plans to use windfall profits from frozen Russian assets held within the EU to pay for Ukraine's defence and eventual reconstruction. In a statement the Council said that of these funds, 90% will go to the European Peace Facility, while the remaining 10% will got to EU programmes to support Ukraine. 

• Reuters reports, "The EU expects the assets to yield about 15-20 billion euros ($16.30-$21.70 billion) in profits by 2027. Ukraine is expected to receive the first tranche in July, EU diplomats said."
• The EU has pursued a less drastic plan than had initially been called for by the US, where the Biden administration was initially seen to favour seizing frozen Russian assets in their entirety. Indeed, in April President Joe Biden's signature on the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act as part of the multi-billion dollar aid package for Ukraine enabled the US gov't to do so. However, it is seen as unlikely to go down this route without EU and G7 backing. 
• Some, including ECB President Chrisitne Lagarde have warned of unintended consequences if frozen assets are seized wholesale, including retaliatory measures against EU deposits held elsewhere and damage to the image of the EU as a safe and reliable destination for financial operations.