Copyright © 2024

The work of Euromaidan Press is supported by the International Renaissance Foundation

When referencing our materials, please include an active hyperlink to the Euromaidan Press material and a maximum 500-character extract of the story. To reprint anything longer, written permission must be acquired from [email protected].

Privacy and Cookie Policies.

FT: US proposes debt to fund Ukraine using profits from Russian assets

The US hopes that the idea could generate tens of billions dollars for Ukraine.
European Union Flags
European Union Flags. Credit: Wikimedia Commons/Thijs ter Haar
FT: US proposes debt to fund Ukraine using profits from Russian assets

The US has proposed raising tens of billions of euros in debt for Ukraine, secured against the future profits generated by Russian assets that have been frozen by Western countries, according to the Financial Times.

The issue of using frozen funds to help Kyiv in its struggle against Russian invaders has become more urgent in recent months, with the US Congress halting assistance for Ukraine.

Meanwhile, the G7 countries have been split on what to do with €260bn in Russian assets frozen by the West since February 2022.

Washington supports the idea of confiscating the funds and transferring them to Kyiv, while some European officials fear that the move can destabilize financial markets.

As per FT, the EU countries would instead give Kyiv the profits generated by the underlying assets.

“We’re at a point in which we should explore every possible avenue to maximize the value of the immobilized reserves for Ukraine,” said Daleep Singh, a US deputy national security adviser for international economics, on 10 April in Kyiv.

Singh said the US proposal aims to expedite the present value of the future interest stream of the immobilized assets through a bond or a loan.”

He highlighted that European counterparts had previously shown a readiness to transfer interest from the reserves to Ukraine on a biannual basis. Nonetheless, there are strategies available to amplify the value of those income streams over the long term.

“Instead of just transferring the yearly profits from the reserves . . . it’s conceptually possible to transfer the ten years of profits or 30 years of profits.

The present value of those profits adds up to a very large number,” he said.

The G7 minister will most likely be discussed on the sidelines of the World Bank and IMF spring meetings in Washington next week and approved at an annual summit in June.

Currently, most of the frozen Russian assets are now in the EU, with €190 bn in Russian central bank assets held at Euroclear, a central securities depository in Brussels. The funds have generated €3.85 bn in profits since 2022, and the EU countries have been discussing deploying the money to help Ukraine.

Under a new EU plan, which is planned to be adopted by all the bloc’s members, future profits will be used to buy weapons for Ukraine and fund reconstruction efforts.

With the US proposal added to the mix, a possible compromise would be achieved by using part of the profits for military equipment purchase and reconstruction and part of it to back debt. It will also generate more funds for Ukraine.

According to a European official, a bond could deliver between €30 bn and €40 bn based on the estimated profits from the Russian funds in Euroclear over the next ten years and €50 bn-€60 bn over the next 15-20 years. However, the exact amounts of profits heavily depend on future interest rates.

Western divisions regarding Russian money matters for Ukraine, with impending discussions on restructuring debts owed to private creditors in 2024. Those discussions are part of an IMF call to plug holes in a $120 bn-plus plan to support Kyiv in the coming years.


You could close this page. Or you could join our community and help us produce more materials like this.  We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!

To suggest a correction or clarification, write to us here

You can also highlight the text and press Ctrl + Enter

Please leave your suggestions or corrections here

    Will the West continue to support Ukraine?
    • Know what moves the world.
    • Stay informed with Kompreno.
    • Get quality journalism from across Europe.
    Special discount
    for Euromaidan Press readers
    Euromaidan Press

    We are an independent media outlet that relies solely on advertising revenue to sustain itself. We do not endorse or promote any products or services for financial gain. Therefore, we kindly ask for your support by disabling your ad blocker. Your assistance helps us continue providing quality content. Thank you!

    Related Posts