EU envoys back setting aside Russian asset profits for Ukraine

BRUSSELS (Reuters) - European Union members agreed unanimously on Monday to set aside billions of euros of windfall profits from Russian central bank assets frozen in Europe, the first step of a plan to help fund Ukraine reconstruction after Russia's invasion.

Ambassadors of the 27 EU countries agreed in principle this first step in a meeting late on Monday, according to a source from Belgium, which holds the six-month presidency of the European Union.

The agreement comes days ahead of a summit at which EU leaders will seek to overcome Hungary's objections to giving Kyiv 50 billion euros of funds for the next four years.

The text will undergo legal and language checks before the ambassadors will have the chance formally to adopt it. The source said this would take place as soon as possible.

The European Commission would then be expected to propose transferring the money set aside to the EU budget and subsequently to Kyiv though it is unclear when it would arrive in Ukraine.

France and Germany have already voiced reservations about the plan, while the European Central Bank has warned it could undermine confidence in the euro and unsettle global markets.

The EU, United States, Japan and Canada froze some $300 billion of Russian central bank assets in 2022 when Russia invaded Ukraine. About $200 billion of that is held in Europe, mainly in the Belgian clearing house Euroclear.

(Reporting by Philip Blenkinsop; Editing by Alistair Bell)

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