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Bloomberg: Biden calls for G7 action to tap Russian frozen assets for Ukraine

Amid Ukraine’s artillery shortage and a stalled $60 billion aid package in the US Congress, US President Joe Biden is urging G7 nations to make progress on plans to tap frozen Russian assets to support Ukraine by their June meeting, Bloomberg reported.

byIryna Voichuk

29/02/2024

2 minute read

Confiscation of Russian assets. Credit: Stanislav Glazkov

Bloomberg: Biden calls for G7 action to tap Russian frozen assets for Ukraine

US President Joe Biden is urging the Group of Seven (G7) nations to advance plans to utilize frozen Russian sovereign assets to support Ukraine by their June meeting, Bloomberg reported, citing people familiar with the matter.

The discussions come amid Ukraine’s dire need for artillery and ammunition, and a $60 billion economic aid package stalled in the US Congress. Biden has reportedly told allies that Ukraine’s fall would disrupt the international order for decades.

G7 officials are exploring options for the $280 billion in immobilized Russian Central Bank assets, such as using them as collateral for debt or issuing guarantees against the frozen funds.

There is consensus among the allies that the funds should remain inaccessible to Russia unless it aids in Ukraine’s reconstruction. However, there is disagreement on the legality of seizing the assets outright. Biden hopes to use the frozen assets for Ukraine’s budget and reconstruction but does not see this as a substitute for aid.

The US believes Russia should not dictate the terms of compensation for the damage it has caused. France, Germany, and the European Central Bank have resisted seizing the funds, fearing Russian retaliation and potential financial instability. US Treasury Secretary Janet Yellen has downplayed these concerns and advocated for G7 collaboration to seize or leverage the assets. The UK and Canada also support asset seizure.

British Prime Minister Rishi Sunak stated that the West should make better use of the “hundreds of billions of frozen Russian assets” currently held by EU countries, the US, Japan, Canada, and others.

The EU Council’s decision on 12 February to isolate frozen Russian funds opens up the possibility of using profits from more than $250 billion in frozen assets of the Russian Central Bank to fund Ukraine’s post-war reconstruction.

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