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'We're not about to fold': Janet Yellen says efforts are underway to package a $50 billion loan to Ukraine using frozen Russian funds

Treasury Secretary Janet Yellen.
Treasury Secretary Janet Yellen.Chip Somodevilla/Getty Images
  • Janet Yellen told The New York Times that G7 leaders will discuss the details of a loan program for Ukraine.

  • The loan would use proceeds from Russia's frozen asset and potentially offer a $50 billion lifeline.

  • The aid could offer Ukraine a means of survival as Moscow amplifies its offensive.

The US and its allies are getting serious about a plan to finance Ukraine using interest earned on Russia's frozen assets. Under the idea, these profits would be bundled together into a sizable loan, a possible means of survival for Kyiv.

"Showing that we do have the means of translating earnings on the frozen assets into a stream of support for Ukraine, I think, is an important way to demonstrate that we're not about to fold," Treasury Secretary Janet Yellen told The New York Times. "We're going to be able to help Ukraine."

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Though not the only option available, it's the most promising suggestion on how to best use the $300 billion worth of Russian reserves, she said. These foreign assets were made inaccessible to the country in 2022, shortly after Moscow launched its invasion of Ukraine.

If the Group of 7 leaders are able to finalize the loan's details in a meeting next week, it could make this a reality for Ukraine. So far, reserves have sat untouched in depositories, such as Euroclear; there, a trove worth $206 billion is generating over $3 billion in interest a year.

According to NYT, a loan based on the accumulated interest could offer Kyiv an up-front lifeline of $50 billion.

However, particulars still need to be agreed upon. G7 leaders need to decide how to deliver the funds or how the loan will be repaid if interest rates fall, tanking the proceeds.

Such questions are the latest in a long line of discourse between Western leaders on how to use frozen Russian assets. Previously, some countries were ready to tap the reserves themselves, while others protested the idea as a dangerous move. Meanwhile, counterparts in Russia have voiced warnings of retribution if the reserves are grabbed.

"I think we see considerable interest among all of our partners in a loan structure that would bring forward the stream of windfall profits," Yellen said.

While this has meant months of G7 negotiating, finding a common-ground solution is now taking on rapid seriousness, as Ukraine's ability to hold off Russia is becoming ever-more questionable.

"I think we see considerable interest among all of our partners in a loan structure that would bring forward the stream of windfall profits," Yellen said.

On Monday, Ukrainian President Vlodimir Zelenskyy expressed frustration behind constant delays in Western aid.

"Every decision to which we, then later everyone together, comes to is late by around one year," he told the outlet. With Russia's offensive efforts mounting, Zelenskyy has urged Western allies to get involved more directly, such as by shooting down Russian rockets.

Read the original article on Business Insider