US, G-7 allies ‘very close’ to finalising $65b Ukraine loan, Yellen says
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US Treasury Secretary Janet Yellen said the US contribution to the loan would be repaid from earnings on frozen Russian assets.
PHOTO: AFP
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WASHINGTON - US Treasury Secretary Janet Yellen said on Oct 22 that the Group of 7 (G-7) and EU allies are “very close” to finalising a US$50 billion (S$65 billion) loan to Ukraine backed by frozen Russian assets, with an expected US contribution of about US$20 billion.
Dr Yellen told a news conference at the start of International Monetary Fund and World Bank annual meetings that she has a high degree of confidence that the Russian sovereign assets, mostly held in Europe, will remain immobilised despite the continued need for EU renewal of the freeze every six months.
“We’re very close to finalising America’s portion of this US$50 billion loan package,” Dr Yellen said when asked about final negotiations over the loan intended to go to Ukraine by the end of 2024.
She emphasised that the US contribution would be repaid from the earnings on Russian assets, and not by US taxpayers.
Republican presidential candidate Donald Trump has vowed to “get out” of the Russia-Ukraine war, underscoring the G-7 allies’ plans to finalise the loan ahead of the Nov 5 US election.
EU lawmakers earlier on Oct 22 approved the bloc’s plan to use frozen Russian assets
Dr Yellen said that the US is prepared to contribute some US$20 billion towards the loan and that there was “nothing significant that still needs to be worked out”.
The US had pressed the EU for stronger assurances that the funds, held mainly by Euroclear in Belgium, would remain frozen for a long period, even if there were a truce that ended hostilities in Ukraine. That would reduce the risk that US taxpayers would be responsible for repaying the loan.
Dr Yellen said the US was prepared to accept that the EU will keep the assets frozen long term, especially given the current course of the war.
“I think the assurances are already there. We asked for some mild strengthening, but feel good that this is a secure loan that will be serviced by Russian assets, by Russia and not by American taxpayers,” Dr Yellen said.
In prepared remarks, Dr Yellen said that as soon as next week, the US will unveil strong new sanctions aimed at curbing Russia’s Ukraine war machine, including “intermediaries in third countries that are supplying Russia with critical inputs for its military”.
She declined to elaborate on the targets of the sanctions when asked whether they would include secondary sanctions against financial institutions.
New authorities granted in 2023, in a presidential executive order to cut off banks from dollar access if they facilitate transactions to sanctioned Russian entities, have already had a significant effect on deterring such activity, she said.
“So, further actions of that type remain on our radar screen as well.” REUTERS
