2024-04-02 15:20:09
Treasury Secretary Janet Yellen on Tuesday expressed her strongest public support for the idea of unwinding $300 billion in frozen Russian central bank assets and using them for Ukraine’s long-term recovery.
“Our coalition must find a way to unlock the value of these frozen assets to support Ukraine’s continued resistance and long-term reconstruction,” Yellen said in Sao Paulo, Brazil, where 20 finance ministers and governors attended.
“I believe there are strong international legal, economic and moral grounds for moving forward. This would be a decisive response to Russia’s unprecedented threat to global stability,” he said.
The United States and its allies have frozen hundreds of billions of dollars in Russian foreign assets as punishment for Moscow’s aggression against Ukraine. While the officials of many countries are debating the legality of transferring these funds to Ukraine, these billions remain unused as the war enters its third year. More than two-thirds of the immobilized funds of the Central Bank of Russia are in the EU.
Using assets to help Ukraine “will send a message that Russia cannot win by prolonging the war and encourage it to come to the negotiating table for a fair peace with Ukraine,” Yellen said.
The idea of using frozen Russian assets has gained attention recently as continued allied funding for Ukraine has become increasingly uncertain and the US Congress deadlocked on providing additional support. But there are also concessions. Because the weaponization of global finance can damage the position of the US dollar as the world’s dominant currency.
Yellen said on Tuesday that it was “very unlikely” that the use of frozen funds would harm the dollar’s position in the global economy, “especially given the unique situation of Russia, which brazenly violates international norms.” Indeed, there is no alternative to the dollar, euro and yen,” Yellen said.
President Joe Biden’s national security spokesman, John Kirby, said at a White House briefing on Tuesday that “we believe Russia should be held accountable for the damage it has done to Ukraine by investigating the use of these frozen assets.”
He said “we still need more legislative authority from Congress” to spend the frozen funds and “we need our coalition partners to join us.”
A bipartisan bill circulating in Washington, called the Restoring Economic Prosperity and Opportunity for Ukrainians Act, would use seized assets from the Russian Central Bank and other sovereign assets for Ukraine. Leading lawmakers tried to push it to help Ukraine, but little progress has been made since then.
Earlier this month, the European Union passed a law to reserve windfall revenues from frozen assets of the Russian Central Bank. Yellen said she fully supports it.
Brazil presided over the Group of 20 (G20) this month, and this week there will be a meeting of finance ministers. Topics discussed include poverty reduction, climate change, and the war in the Gaza Strip and Ukraine. G20 leaders are planning to gather for a summit in Rio on November 18-19.
Turan