Unlock the US Election Countdown newsletter for free
The stories that matter on money and politics in the race for the White House
The US has finally finalised plans to give an additional $20bn to Ukraine as part of a G7 loan backed by profits generated from Russian assets frozen in Europe, with at least half of the money to be disbursed by the end of the year.
The agreement comes on the heels of an announcement that the UK will extend an additional £2.3bn loan for military aid to the country as part of a wider effort by G7 countries to provide $50bn in additional support.
The EU approved funding earlier this month, but with US support, it will be able to contribute less. Brussels is likely to lend about $20bn. Canada and Japan are poised to provide the remainder.
Most of Russia’s frozen central bank assets are held in Europe and are expected to generate about €3bn in profits per year.
“Never before has a multilateral coalition frozen the assets of an aggressor country and then harnessed the value of those assets to fund the defence of the aggrieved party, all while respecting the rule of law and maintaining solidarity,” Daleep Singh, the White House’s deputy national security adviser for international economics, told reporters on Wednesday.
Singh added that Ukraine would now “receive the assistance it needs now without burdening our taxpayers”.
Half of the funds from the US will be earmarked for economic programmes, including direct budget aid for social assistance and other initiatives. The other portion will go towards military support, if Joe Biden’s administration can get authority from Congress to raise the amount of foreign military financing that can be provided to Ukraine.
Singh said his team would be working with legislators between now and December, when some of the funds would be dispersed to an entity run by the World Bank, to “assess those odds”.
“The only question we’re talking about here is the split between economic assistance and security assistance,” said Singh. “We’re going to provide $20bn either way.”
Looming over the deadline is the upcoming US presidential election, which is less than two weeks away. Former president Donald Trump, who is neck-and-neck in polls with current vice-president Kamala Harris, has questioned the need to provide aid to Ukraine if re-elected.
G7 countries have been working for months on the structure of the loan, after facing hurdles including the EU’s failure to guarantee that the Russian assets would remain immobilised for at least three years.
According to a person familiar with the matter, the US Treasury had in recent weeks spoken daily with officials in Ukraine and Europe to finalise the terms in an effort to attain as big of a US contribution as possible, while receiving sufficient assurances about repayment.
Treasury secretary Janet Yellen on Wednesday met with Ukraine finance minister Sergii Marchenko to ratify an agreement that Russia, rather than US taxpayers, would foot the bill for any funds yet to be repaid.
“This loan initiative will provide Ukraine with urgently needed funds and will make funds available by the end of this year,” Yellen said in a statement. “It will send a message to [Vladimir] Putin that waiting out our coalition is a losing strategy.”
In a separate statement, Biden said: “Our efforts make it clear — tyrants will be responsible for the damages they cause”.
Additional reporting by Henry Foy in Brussels
Read the full article here
