U.S. Treasury Secretary Janet Yellen called on the world's largest industrialized nations to find ways to “unlock the value” of idled Russian assets to strengthen Ukraine's defenses against Russian aggression and for its long-term post-war recovery.
“I believe there is a strong international legal, economic and moral basis for moving forward,” Yellen said in prepared remarks Tuesday before meeting leaders of the world's economic powers in Sao Paulo. Stated.
advertisement
Continue reading below
Her comments come as Ukraine's financial needs remain high and as the civil war enters its third year with no signs of abating, G7 countries are debating what to do with national assets frozen when the invasion broke out. It was announced during the.
The European Union, G7 countries and Australia have frozen around 260 billion euros ($282 billion) in the form of securities and cash, more than two-thirds of which is frozen within the EU. All parties agree that these funds should be banned from Russia unless they agree to help rebuild Ukraine, but they are at odds over the legality of seizing the assets outright. .
“This will be a decisive response to Russia's unprecedented threat to global stability,” Yellen said. “It would make it clear that Russia cannot win by prolonging the war and give it an incentive to come to the table for fair peace negotiations with Ukraine.”
The United States and the United Kingdom have called on G7 allies to completely seize central bank assets, but European countries in the group, particularly France and Germany, are now concerned about legal concerns and the potential to undermine the stability of the euro. I am against this move. As well as setting a dangerous precedent.
Debate over the use of assets is intensifying as Russian President Vladimir Putin's forces gain strength on the battlefield. The Biden administration wants to send an important signal of new aid to Ukraine as Republicans in Washington continue to set hurdles for new aid to Kiev.
The position of EU member states is crucial because the bulk of the funds are in Europe, most of them in Belgium-based payments firm Euroclear. Both clearinghouses and the European Central Bank are skeptical of the right to seize assets.
Still, G7 countries are debating their options. Some of the ideas currently being discussed include using the funds as collateral for debt financing or as security for loans.
advertisement
Continue reading below
The EU is gradually moving ahead with plans to apply a windfall tax, at least to profits generated by locked-in funds. Last year, the fund netted him 4.4 billion euros.
Yellen also highlighted the Middle East conflict and said she called on the Israeli government to take “a number of steps,” including restoring work permits for Palestinians and reducing barriers to commerce in the West Bank.
“These actions are critical to the economic well-being of Palestinians and Israelis,” she said.
© 2024 Bloomberg
