Treasury Secretary Janet Yellen on Tuesday offered her strongest public support yet for the idea of liquidating roughly $300 billion in frozen Russian Central Bank assets and using them for Ukraine’s long-term reconstruction. “It is necessary 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 said in remarks in Sao Paulo, Brazil, where Group of 20 finance ministers and central bank governors are meeting this week.
Quick Read
- Yellen’s Support for Using Russian Assets: Treasury Secretary Janet Yellen expressed strong support for utilizing approximately $300 billion in frozen Russian Central Bank assets to aid Ukraine’s resistance and reconstruction efforts.
- Statement in Sao Paulo: During a meeting with G20 finance ministers and central bank governors in Sao Paulo, Brazil, Yellen emphasized the importance of unlocking these assets to bolster Ukraine amid the ongoing conflict with Russia.
- Legal, Economic, and Moral Justification: Yellen argued that there is a robust case from international law, economic, and moral perspectives for moving forward with the liquidation of these assets, highlighting it as a response to Russia’s threat to global stability.
- Impact on the War and Negotiations: Utilizing the frozen Russian assets could signal to Russia that prolonging the war will not lead to victory, potentially encouraging negotiations for a just peace with Ukraine.
- Concerns and Considerations: The proposal to use Russia’s frozen assets raises concerns about the potential implications for global finance, particularly the dominance of the U.S. dollar. However, Yellen believes the unique circumstances of Russia’s actions and the lack of viable alternatives to major currencies like the dollar, euro, and yen mitigate these concerns.
- EU’s Recent Actions: The European Union recently passed legislation to allocate windfall profits from frozen Russian central bank assets, a move Yellen endorses.
- G20 Discussions: The G20 finance ministers’ meeting in Brazil, under its presidency, is addressing various global issues, including the conflict in Ukraine, with a leaders’ summit scheduled for November in Rio.
The Associated Press has the story:
Yellen urges world leaders to ‘unlock’ frozen Russian Central Bank assets, send them to Ukraine
Newslooks- WASHINGTON (AP) —
Treasury Secretary Janet Yellen on Tuesday offered her strongest public support yet for the idea of liquidating roughly $300 billion in frozen Russian Central Bank assets and using them for Ukraine’s long-term reconstruction.
“It is necessary 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 said in remarks in Sao Paulo, Brazil, where Group of 20 finance ministers and central bank governors are meeting this week.
“I believe there is a strong international law, economic, and moral case for moving forward. This would be a decisive response to Russia’s unprecedented threat to global stability,” she said.
The United States and its allies froze hundreds of billions of dollars in Russian foreign holdings in retaliation for Moscow’s invasion of Ukraine. Those billions have been sitting untapped as the war grinds on, now in its third year, while officials from multiple countries have debated the legality of sending the money to Ukraine. More than two-thirds of Russia’s immobilized central bank funds are located in the EU.
Using the assets to help Ukraine “would make clear that Russia cannot win by prolonging the war and would incentivize it to come to the table to negotiate a just peace with Ukraine,” Yellen said.
The idea of using Russia’s frozen assets has gained traction lately as continued allied funding for Ukraine becomes more uncertain and the U.S. Congress is in a stalemate over providing more support. But there are tradeoffs since the weaponization of global finance could harm the U.S. dollar’s standing as the world’s dominant currency.
Yellen said Tuesday that it is “extremely unlikely” that tapping the frozen funds would harm the dollar’s standing in the global economy “especially given the uniqueness of the situation where Russia is brazenly violating international norms. Realistically there are not alternatives to the dollar, euro and yen,” Yellen said.
Earlier this month, the European Union passed a law to set aside windfall profits generated from frozen Russian central bank assets. Yellen calls that “an action I fully endorse.”
Brazil kicked off its presidency of the Group of 20 nations this month, with finance ministers meeting this week. Topics for discussion include poverty alleviation, climate change and the wars in the Gaza Strip and in Ukraine. G20 leaders are slated to gather at a Nov. 18-19 summit in Rio.
