The US is close to an agreement with its NATO allies to provide Ukraine with a $50 billion loan that can be used to purchase more weapons. Washington will contribute the largest amount, $20 billion, and will use the interest from frozen Russian assets to repay the loan.
Treasury Secretary Janet Yellen said Tuesday, “We’re 99 percent there and it’s nailing down just a couple of relatively small things. We are very close.” The US will contribute $20 billion to the loan. The EU will collectively add $38 billion, with an additional $3 billion from the UK.
For over a year, Washington has been conspiring with its NATO allies to use frozen Russian assets to loan Ukraine money. To repay the loan, the plan calls for using the interest generated from the $200 billion in frozen Russian funds held in various Western countries.
However, Washington only controls a small portion of the Russian funds, roughly $5 billion, while the bulk is held by European Union members. The EU’s mechanism for keeping the Russian assets frozen needs to be renewed every six months. As the term of the loan will be a decade, if not longer, it’s possible that the funds will be released prior to the loan being repaid.
Still, Yellen insisted the White House is confident that the American taxpayer would not be left responsible for repaying the loan. “We have a high degree of confidence that the money will be there and will remain locked down,” Yellen said. “We asked for some modest strengthening but feel good that this is a secure loan that will be serviced by Russian assets — by Russia and not by American taxpayers.”
To alleviate the American concerns, members of the EU want the body to extend the term of the frozen Russian funds from six months to three years. Hungary is suspending the EU from making that decision until after the US election next month.
Yellen said the Biden administration is unconcerned with the potential ending of the sanctions because it is “inconceivable” for any EU member to terminate the penalties while Russia’s invasion persists.
