Janet Yellen Calls For US, EU To Use Russian Assets To Pay For Ukraine War

Treasury Secretary Janet Yellen called for the U.S. and European Union to form a plan to seize or leverage Russian assets to offset Ukraine’s costs in fending off Russia’s invasion.

The U.S. and E.U. have access to about $280 billion worth of frozen Russian assets that Yellen and other officials hope to tap for Ukraine’s benefit. In remarks planned to be delivered in a speech in Frankfurt, Germany, on Tuesday, Yellen called for greater cooperation between the U.S. and E.U. to tap those resources, according to excerpts of Yellen’s speech viewed by Bloomberg.

“It’s vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilized in our jurisdictions for the benefit of Ukraine,” Yellen’s remarks said, according to Bloomberg.

The Treasury secretary also called for continued aid to Ukraine.

“It’s also critical that we ensure Ukraine has the support it needs to equip its military, fund critical services, and ultimately rebuild in the medium- to long-term,” the speech continued.

The proposal to seize Russian assets to offset the cost of the war for Ukraine has earned critics in the West who are concerned that such a move would destabilize international financial markets. If the risk to foreign assets held in the U.S. or Europe becomes too great, countries may move to reduce or eliminate their exposure to such recriminations from Western governments. The result would be a much more fragmentary global financial system.

Ukraine has lost ground recently to a renewed Russian offensive in the eastern part of the country. Russia has surged troops into the region, especially in the northeast near Kharkiv, Ukraine’s second-largest city behind Kyiv.

Ukraine’s military has struggled to hold ground as it runs low on munitions, supplies, and soldiers.

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“The situation is on the edge,” Gen. Kyrylo Budanov, the head of Ukraine’s military intelligence agency, told The New York Times last week. “Every hour this situation moves toward critical.”

Budanov delivered his assessment of the situation from a bunker in Kharkiv. He said that the Ukrainian military lines are strained from a lack of troops.

“All of our forces are either here or in Chasiv Yar,” he added, referring to a Ukrainian stronghold about 120 miles to the south of the city, also under threat from Russian forces. “I’ve used everything we have. Unfortunately, we don’t have anyone else in the reserves.”

President Joe Biden signed legislation for the U.S. to provide Ukraine with about $60 billion more in military aid last month.