Yellen Contemplates Potential $50bn Loan from Frozen Russian Assets in Ukraine Conflict | Business News
According to the US Treasury secretary in an interview with Sky News, there is a “possibility” that G7 nations will offer support to Ukraine’s war effort using billions of dollars in loans tied to frozen Russian assets. Janet Yellen expressed optimism about a collective approach on the matter before a crucial meeting of finance ministers in Italy, emphasizing Ukraine’s significant needs.
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Yellen also acknowledged the potential for China to react to the imposition of US sanctions on its extensive green economy, criticizing the “massive Chinese overcapacity” in markets like solar panels and electric cars.
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Yellen declined to comment on the upcoming UK general election but expressed her admiration for women achieving high positions in politics and economics. There is speculation that Rachel Reeves of the Labour Party could become the UK’s first female Chancellor of the Exchequer.
A seasoned economist and former chair of the US central bank, Yellen’s remarks were made in Frankfurt before the G7 talks, expected to focus on imposing sanctions against Russia for its actions in Ukraine.
She is advocating for an agreement to utilize interest earned on $300bn (£236bn) of seized Russian state assets to assist in funding Ukraine’s war effort.
Seized Russian assets could fund Ukraine war effort
This funding could amount to $50bn but would be accessible only in the form of loans. Initially, Yellen proposed the complete confiscation of Russian funds, primarily in euros.
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However, the EU officials opposed this proposal, citing potential risks to the Euro. Yellen expressed hope for consensus, emphasizing the need for the G7 to work together to provide substantial resources for Ukraine in the coming years.
She highlighted a plan approved by the European Union to use windfall profits from Russian assets in Euroclear for Ukraine’s benefit, as well as the proposal to redirect interest revenues from non-Russian assets to support Ukraine.
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‘Common concerns’ over China
Regarding Israel’s war with Hamas, Yellen mentioned that there had been no discussions about sanctions against Israel in her department for its handling of the crisis in Gaza. She noted shared concerns in Europe about economic challenges posed by China, particularly in flooding Western markets with Chinese goods in green economy sectors like electric cars and solar panels, aided by state support.
The US argues that this advantage is only possible due to state aid.
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Biden reveals Chinese tariffs
Yellen mentioned the possibility of retaliatory tariffs by China, highlighting the working relationship established through discussions on economic and financial matters. Despite economic challenges, both countries aim to maintain a positive trade relationship while ensuring a level playing field. Yellen emphasized the need for a more resilient supply chain to reduce dependence on China for critical supplies.
