US and France Agree to Use Frozen Russian Assets for Ukraine Aid
In a significant development, US President Joe Biden has announced an agreement with French President Emmanuel Macron to use profits from frozen Russian assets to aid Ukraine. This move is part of a broader plan by the Group of Seven (G7) nations and the European Union to provide substantial financial support to Ukraine amidst its ongoing conflict with Russia.
The profits in question originate from around 260 billion euros ($280.9 billion) of Russian central bank funds that have been frozen worldwide, with the bulk being held in the European Union. These frozen assets generate between 2.5 billion and 3.5 billion euros in annual profits, which the EU considers windfall gains not contractually owed to Russia. The plan promoted by the United States is to leverage these profits to secure a sizeable loan of $50 billion for Ukraine, ensuring regular income and financial stability for Kyiv through 2025.
The utilization of these funds has raised concerns in some quarters, with Russia labeling the potential diversion of profits from its frozen assets as theft. Despite these objections, US Treasury officials have confirmed that the United States, along with its G7 partners, are making significant progress on this front. Janet Yellen, the US Treasury Secretary, has indicated that backing Ukraine via proceeds from frozen Russian assets is a primary option under consideration, although she emphasizes that all options remain on the table.
The agreement between Biden and Macron marks a notable step towards solidifying this plan, but it also requires approval from the 27-member European Union. Yellen highlighted the need for consensus within the EU bloc, noting that while the proposal has garnered substantial support, it is far from a done deal.
- Janet Yellen pointed out that the matter needs to crystallize within the European Union to become a formal proposal with broad acceptance. She stressed that many EU member states support the idea, but it is crucial to emphasize that it’s not a foregone conclusion.
- Concerns about exploiting profits from Russian assets are not isolated. Some countries within the G7 express hesitation, stressing ethical and legal implications. However, the urgency of aiding Ukraine and ensuring its financial stability is pushing these discussions forward.
- A US Treasury official also reassured that progress is being made, and there is robust international collaboration to refine and implement the plan. They cited the importance of transforming these profits into a sustainable revenue stream for Ukraine's future rebuilding efforts.
