EU foreign ministers back Russian asset tax scheme – Bloomberg

The bloc wants to direct the income generated by Moscow’s frozen reserves to Ukraine

The EU is moving forward with plans to impose a windfall tax on the income generated by frozen Russian assets, Bloomberg reported on Tuesday, citing sources.

Bloc members' foreign ministers approved the tax on Monday and their ambassadors will discuss the step later this week, the outlet claimed, citing people familiar with the matter.

The report comes after EU foreign policy chief Josep Borrell said on Monday that member states had reached an agreement on the windfall tax, and that the bloc's ambassadors were expected to greenlight the decision to first accumulate the funds on a separate account and then use them in Ukraine.

The report comes ahead of an EU summit scheduled for next week where the bloc’s leaders plan to discuss new financial aid to Kiev. A four-year package worth €50 billion and financed from the EU budget was vetoed by Hungary last month. The country’s prime minister, Viktor Orban, spoke against committing money for years in advance and warned that supporting Kiev must not “harm” the bloc’s finances.

READ MORE: EU eyeing new plan to bypass Hungary on Ukraine aid – WSJ

The EU and the G7 froze about $300 billion in assets belonging to the Russian central bank in 2022. Most of the assets in the EU are held by the Brussels-based clearing house Euroclear, where they generated about €3 billion in income last year.

A number of countries have spoken out against seizing the assets outright over legal concerns. The idea of taxing the profits instead was first circulated last year. However, according to Bloomberg, it has progressed slowly as several EU member states and the European Central Bank are concerned about the potential impact the move could have on the stability of the euro.

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