US wants guarantees Americans will not be paying off Ukraine's debt
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Janet Yellen stated that the G7 countries are expected to achieve an agreement on the conditions of Ukraine's $50 billion loan by October.
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US Treasury Secretary Janet Yellen in a meeting with Fernando Haddad in Brazil on July 24, 2024. (X photo)
The US government is seeking guarantees that taxpayers would not be liable for repaying Ukraine's $50 billion loan backed by blocked Russian sovereign assets, US Treasury Secretary Janet Yellen told Reuters on Friday.
In June, the Group of Seven (G7) leaders agreed to provide Ukraine with $50 billion by utilizing frozen Russian assets by the end of the year.
Yellen was quoted by Reuters during an interview on the sidelines of the G20 finance meeting in Brazil that "We need assurances that make it clear that American taxpayers are not going to be on the hook to pay off these loans. And we want to make sure it satisfies the budget scorers that these assets will be the source of repayment for these loans."
Yellen stated that the G7 countries are expected to achieve an agreement on the conditions of Ukraine's $50 billion loan by October.
She also described the discussions in Brazil as positive, with pledges that Russian assets would remain frozen long enough to repay Ukraine's debt.
On Friday, the EU sent €1.5 billion to Ukraine, marking the first transfer under a new scheme utilizing Russia's frozen assets, which is estimated at €210 billion across the bloc, Euro News reports.
Ninety percent of this financial aid will fund weapons, ammunition, and air defense systems for Ukraine, while the remaining 10% will support reconstruction, particularly of the energy infrastructure damaged by Russian strikes.
The initiative reportedly intends "to prevent a humanitarian crisis and migration surge" due to power grid destruction.
EU mulls indefinite freeze on Russian assets: FT
The EU is considering freezing Russian assets forever to soothe US fears over the repayment of a $50 billion loan to Ukraine, the Financial Times reported.
The EU froze over €200 billion ($217 billion) in Russian central bank assets following the war in Ukraine.
Following an EU Foreign Affairs ministerial meeting in Brussels on Monday, foreign policy chief Josep Borrell announced that the first installment of 1.4 billion euros ($1.5 billion) in military aid to Ukraine, funded by the profits from frozen Russian assets, will be disbursed in early August.
The purported strategy wants to provide the US with guarantees that the West would be able to tap into the immobilized cash for as long as needed.
On June 12, the G7 stated that Russia must bear responsibility for the damages inflicted on Ukraine, which have surpassed $486 billion. They agreed to provide Ukraine with $50 billion by utilizing frozen Russian assets by the end of the year.
According to the FT, 27 EU ambassadors will meet on Wednesday to consider a proposal for the "open-ended immobilization of Central Bank of Russia assets." The strategy also apparently aims to "provide G7 partners with the highest degree of predictability" about debt repayment.
According to Kremlin spokesperson Dmitry Peskov, the EU's desire to utilize the "stolen" cash to buy weapons for Ukraine "won't go unreciprocated." He also stated that Moscow is looking at measures to inflict legal penalties on anyone who decides to exploit the revenues from Russian assets.
On June 20, Russian Foreign Ministry spokesperson Maria Zakharova said Russia possesses a "wide arsenal" of economic and political countermeasures if the West seizes its sovereign assets, including a tit-for-tat confiscation of Western assets in Russia.
