Janet Yellen says efforts are underway to provide a $50 billion loan to Ukraine using frozen Russian funds.
Janet Yellen told the New York Times that G7 leaders would discuss details of a loan program for Ukraine.
The loan would use proceeds from Russia’s frozen assets and potentially provide a $50 billion lifeline.
This aid could offer Ukraine a means of survival as Moscow steps up its offensive.
The United States and its allies are seriously considering a plan to finance Ukraine using interest earned on frozen Russian assets. According to the idea, these profits would be consolidated into a large loan, a possible means of survival for kyiv.
“Showing that we have the means to translate the benefits from frozen assets into a flow of support for Ukraine is, I think, an important way of demonstrating that we are not about to retreat,” said the Treasury Secretary Janet Yellen to the New York Times. Times. “We will be able to help Ukraine.”
While it’s not the only option available, it’s the most promising suggestion for how best to use Russia’s $300 billion in reserves, she said. These foreign assets were made inaccessible to the country in 2022, shortly after Moscow launched its invasion of Ukraine.
If Group of Seven leaders can finalize the details of the loan at a meeting next week, it could make that goal a reality for Ukraine. So far, reserves have remained intact in depositories, such as Euroclear; There, a treasure trove worth $206 billion generates more than $3 billion in interest per year.
According to the New York Times, a loan based on accrued interest could offer Kiev an initial lifeline of $50 billion.
However, details still need to be agreed. G7 leaders must decide how to distribute the funds or how the loan will be repaid if interest rates fall, causing revenue to fall.
The questions are the latest in a long series of discussions among Western leaders over how to use frozen Russian assets. Previously, some countries were ready to draw on their reserves themselves, while others protested against the idea, calling it dangerous. At the same time, their Russian counterparts warned of reprisals if the reserves were seized.
“I think we’re seeing considerable interest from all of our partners in a loan structure that would deliver a windfall profit stream,” Yellen said.
Although it took months of negotiations within the G7, the search for a common solution is now quickly taking on a serious nature, as Ukraine’s ability to stand up to Russia becomes increasingly questionable.
“I think we’re seeing considerable interest from all of our partners in a loan structure that would deliver a windfall profit stream,” Yellen said.
On Monday, Ukrainian President Vlodimir Zelensky expressed frustration over continued delays in Western aid.
“Every decision we make, and then everyone together, is about a year behind schedule,” he told the outlet. As Russia’s offensive efforts intensify, Zelensky has urged Western allies to become more directly involved, for example by shooting down Russian rockets.
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