Eu countries have adopted a plan to freeze profits from Russian assets and use them for Ukraine's defence

Brussels (Reuters) - European Union countries have formally approved a plan to use windfall profits from EU-frozen Russian central bank assets for defense aid to Ukraine, the Belgian government said Tuesday.

Reuters reported that EU ambassadors reached an agreement earlier this month, and the text of the agreement only needs to be rubber-stamped by EU ministers.

A senior Russian diplomat warned that the plan would have unpredictable consequences and said that sooner or later the EU would have to give back what it had "stolen".

Under the EU deal, 90 per cent of proceeds from the Russian central bank's assets will go into an EU-run fund to provide military aid to Ukraine to defend itself against Russian aggression, with the remaining 10 per cent supporting Ukraine in other ways.

The EU expects these assets to generate profits of about 15 billion to 20 billion euros (about 22 billion to S $29.25 billion) by 2027. Russia's central bank is earning huge interest on its assets, generating so-called windfall profits. Eu diplomats say Ukraine expects to receive the first payment in July.

Shortly after Russia invaded Ukraine in February 2022, the Group of Seven (G7) nations froze about $300 billion worth of Russian financial assets. Since then, the EU and other G7 countries have debated how and whether to use those funds to help Ukraine.