There are growing calls in the United States and Europe to set up a fund for Ukraine, using billions of dollars in bank accounts, investments and other assets frozen by the West in response to Russia’s February 2022 invasion.
“It is imperative and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction,” Yellen told reporters in Sao Paulo, Brazil, where she will attend the G20 on Wednesday and Thursday. at the meeting of finance ministers of the group countries.
“There are strong international legal, economic and moral incentives to move forward.” This would be a decisive response to Russia’s unprecedented threat to world stability. This would make it clear that Russia cannot win by prolonging the war, and would encourage it to sit down at the negotiating table to negotiate a just peace with Ukraine,” she said.
The Treasury secretary called on the G-7 group – Canada, France, Germany, Italy, Japan, the United Kingdom, the United States – and the European Union to take joint action following assessing the risks, including the possibility of resulting financial instability.
“The G-7 should work together and explore several options: confiscating the assets themselves, using them as collateral to borrow on global markets,” she said.
Officials of the G-7 countries say that during the meeting to be held in Sao Paulo, the issue of support to Ukraine, which has been fighting Russian invasion forces for more than two years, will be discussed.
Ukraine has warned it is in dire need of more military and financial aid, a new $60bn loan. with a $55.3 billion (€55.3 billion) US aid package still stuck in Congress.
It drew attention to an estimated $397 billion. dollars (365.7 billion euros) worth of Russian assets frozen by the West – from central bank funds to yachts, real estate and other assets of oligarchs close to President Vladimir Putin.
“We appreciate the opportunities”
But that comes with risks, including possible legal action by Russia and the potential to intimidate other countries, such as China. They, fearing similar actions, may reduce their investments in the West.
Mr. Yellen said the risk to financial stability would arise if the seizure of Russian funds led to mass exchange of Western currencies. But she added that the risk would be minimal if the G-7 acted together.
“I think (financial instability) is very unlikely, especially given the uniqueness of this situation, where Russia is brazenly violating international norms, and a group of countries representing half of the world’s economy (…) are able to work together,” the secretary said.
According to her, there are really no alternatives to the dollar, euro and other currencies of the G-7 countries in the international markets.
“There are risks,” she admitted. “We are working to evaluate and consider options.”
The US Congress is currently considering a bill that would allow the confiscation and disposal of Russian state assets.
The Prime Minister of the United Kingdom Rishi Sunak (Rishis Sunak) in an article in “The Sunday Times” newspaper on Sunday called on the West to be bolder in confiscating Russian assets, and to send the already increased interest on the frozen assets to Ukraine.
Spiros Lampridis, Greece’s special national envoy to Ukraine, told AFP on Monday that Europeans were moving towards agreement on the more subtle option of confiscating profits from Russian investments and public or private assets to establish a fund for Ukraine, saying it was “several a matter of months.”
He estimated the move would bring in $50-60 billion. euros. About 500 billion will be needed to rebuild Ukraine. euros or probably much more.
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2024-04-23 23:23:38
