The nations of the European Union have agreed to a plan that would set aside the earnings from Russian central bank assets, worth billions of dollars, that have been frozen in response to Russia’s involvement in the war in Ukraine. This information was shared by an EU representative.

The preliminary deal, finalized on Monday evening, still requires official approval but is considered a initial measure towards utilizing a portion of the 200 billion euros ($216 billion) worth of Russian central bank resources in the EU to assist Ukraine in recovering from damages caused by Russia.

The person in authority, who preferred not to be named as the deal had not yet been officially approved, stated that the group would permit the collection of exceptional earnings from the frozen assets in order to aid the rebuilding of Ukraine.

The allocation of funds will be determined at a later time, as the matter is still complicated by legal and practical factors.

Due to political considerations, there is a sense of urgency in Ukraine as they struggle to meet their needs. Plans for aid from the EU and United States are being delayed, as there is uncertainty about their continued support at the same level as the first two years of the war.

On Thursday, European Union leaders will convene in hopes of giving the green light to a 50 billion euro ($54 billion) aid plan for Ukraine, despite the opposition of Hungarian Prime Minister Viktor Orban.

While utilizing the unutilized resources may appear to be a sensible course of action, there are concerns that weaponizing them could potentially damage the EU’s reputation in the international financial marketplace.

Earlier in the month, President of Ukraine Volodymyr Zelenskyy urged for a decisive action to be taken this year regarding frozen assets in Western banks. He suggested that these funds should be allocated towards defending against Russian aggression and rebuilding Ukraine.

On Monday evening, the EU took a significant step that could potentially allow EU member nations to enforce similar measures in the future. Ukraine’s Group of Seven allies are currently searching for a suitable legal structure to implement their plan.

At the beginning of Russia’s invasion, the United States declared that they, along with their allies, had hindered Russia’s access to over $600 billion held outside of its borders. This included approximately $300 billion belonging to Russia’s central bank. In the aftermath, the U.S. and its allies have consistently implemented specific sanctions against businesses and affluent individuals connected to Russian President Vladimir Putin.

According to the World Bank’s most recent evaluation, published in March 2023, the estimated cost of rebuilding and restoring Ukraine will be $411 billion over the course of the next decade. This amount encompasses both public and private funding requirements.

Currently holding the rotating presidency of the European Union for the next six months, Belgium is taking charge of discussions regarding the possibility of seizing Russian assets. Additionally, it is the primary location where frozen Russian assets under sanctions are being held.

The government is receiving taxes on properties and possessions. Belgian leader Alexander De Croo stated in October that 1.7 billion euros ($1.8 billion) from tax revenue was currently accessible and would be allocated towards purchasing military resources, providing aid, and aiding in the reconstruction of the war-torn nation.