“Treasury Secretary Janet Yellen Supports Liquidating Frozen Russian Assets for Ukraine’s Reconstruction”

Treasury Secretary Janet Yellen Supports Liquidating Frozen Russian Assets for Ukraine’s Reconstruction

In a powerful statement of support, Treasury Secretary Janet Yellen has advocated for the liquidation of approximately $300 billion in frozen Russian Central Bank assets to aid in Ukraine’s long-term reconstruction. Yellen made these remarks during a meeting of Group of 20 finance ministers and central bank governors in Sao Paulo, Brazil. She emphasized the urgency and necessity of unlocking the value of these immobilized assets to bolster Ukraine’s resistance and facilitate its recovery.

The freezing of Russian foreign holdings by the United States and its allies was a response to Moscow’s invasion of Ukraine. However, these funds have remained untapped for years as the conflict continues to escalate. The debate surrounding the legality of redirecting these funds to Ukraine has been ongoing, with officials from various countries weighing in on the matter. Notably, more than two-thirds of Russia’s immobilized central bank funds are located in the European Union.

Yellen argues that utilizing these assets to support Ukraine would send a clear message that Russia cannot prevail by prolonging the war. It would also incentivize Russia to engage in negotiations for a just peace with Ukraine. As allied funding for Ukraine becomes increasingly uncertain and the U.S. Congress remains deadlocked on providing additional support, the idea of using Russia’s frozen assets has gained traction.

However, there are tradeoffs to consider. Weaponizing global finance could potentially harm the standing of the U.S. dollar as the world’s dominant currency. Yellen addressed this concern, stating that it is “extremely unlikely” that tapping into the frozen funds would undermine the dollar’s global position. She highlighted the unique circumstances surrounding Russia’s brazen violation of international norms and emphasized that there are no viable alternatives to the dollar, euro, and yen.

John Kirby, President Joe Biden’s national security spokesman, echoed Yellen’s sentiments during a White House press briefing. He emphasized the need for Russia to be held accountable for the damage inflicted on Ukraine and expressed support for exploring the option of utilizing the frozen assets. However, Kirby stressed that more legislative authorities from Congress are required to access these funds, and coalition partners must also join in this endeavor.

A bipartisan legislation called the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act is currently circulating in Washington. This act proposes using confiscated assets from the Russian Central Bank and other sovereign entities to provide aid to Ukraine. While leading lawmakers initially pushed for its passage, the legislation has since stalled.

The European Union has taken its own steps to address the issue by passing a law that sets aside windfall profits generated from frozen Russian central bank assets. Yellen expressed her full endorsement of this action, further highlighting the international support for utilizing these funds to aid Ukraine.

The meeting of G20 finance ministers in Brazil this week marks the beginning of Brazil’s presidency over the group. Discussions will cover a range of topics, including poverty alleviation, climate change, and ongoing conflicts in the Gaza Strip and Ukraine. The G20 leaders are scheduled to convene for a summit in Rio on November 18-19.

The support shown by Treasury Secretary Janet Yellen for liquidating frozen Russian assets to aid Ukraine’s reconstruction is a significant development. It underscores the urgency of the situation and the need for international cooperation to address Russia’s aggression. As the debate continues, it remains to be seen how this proposal will progress and whether it will ultimately provide the much-needed assistance for Ukraine’s long-term recovery.