US proposes mechanism to G7 to raise US$50bn for Ukraine from Russian assets
THURSDAY, 21 MARCH 2024, 22:57
The US has proposed its allies in the G7 group to create a special purpose company to issue at least US$50 billion of bonds from the income of frozen Russian sovereign assets and use these funds to support Ukraine.
Details: The proposal envisages merging US$280 billion of Russian Central Bank assets that have been frozen by G7 countries and the EU in the special purpose vehicle, the income of which will be used to provide so-called freedom bonds.
- More than two-thirds of frozen Russian assets are blocked in the EU, where they bring about US$3.6 billion in net income annually.
- Proceeds from a potential bond offering would almost equal the US$60 billion of American aid stuck in Congress.
Some G7 countries, including Germany and France, expressed their concerns about the new idea, another source said.
The effort could bring in much more than $50 billion, the source said.
- Some EU countries, specifically Estonia, urged the allies to be bolder and seize these assets.
- Earlier, the G7 stated that the assets would remain frozen until Russia agrees to pay Ukraine for the damage it had caused.
- The US argument is to come up with a solution that would maximise the income from frozen assets and provide for the value of the windfall profits in order to deliver more support to Ukraine faster.
Reportedly, some Western banks started lobbying against the EU’s proposal to redistribute the billions of euros of interest generated from the frozen Russian assets, fearing it may lead to costly court proceedings.
- Austrian Chancellor Karl Nehammer stated that Vienna opposes the idea of using the revenue from frozen Russian assets to fund the armament for Ukraine.
- At the same time, Chancellor of Germany Olaf Scholz and Prime Minister of Belgium Alexander De Croo approve the idea of using income from Russian assets to purchase weapons for Ukraine.
Bloomberg:
US proposes $50 billion bond to support Ukraine with frozen Russian assets
US proposes $50 billion bond to support Ukraine with frozen Russian assets
With US funding for Ukraine stalled in Congress, the US proposes using profits from frozen Russian assets to issue at least $50 billion in bonds to aid Ukraine.
The US has suggested to its Group of Seven (G7) allies the creation of a special purpose vehicle (SPV) to issue at least $50 billion of bonds, backed by profits from frozen Russian sovereign assets, to support Ukraine, Bloomberg reported, citing sources familiar with the plan. The proposal aims to pool the $280 billion of Russian central bank assets frozen by G7 countries and the EU, using the profits to back the so-called freedom bonds.
- More than two-thirds of Russia’s frozen assets are in the EU, generating around $3.6 billion in net profits annually.
- The proceeds from the proposed bond offering would nearly match the $60 billion of US aid currently stalled in Congress.
- The initiative comes at a critical time, as Western allies face challenges in funding Kyiv amidst artillery shortages and Russian advances in the east.
According to Bloomberg, the proposal aims to pool the $280 billion of Russian central bank assets frozen by G7 countries and the EU, using the profits to back the so-called freedom bonds.
Some G7 nations, including Germany and France, have expressed caution over the new proposal, while others, like Estonia, have advocated for bolder measures, such as outright seizing the assets. The G7 has previously stated that the assets will remain frozen until Russia agrees to compensate Ukraine for damages.
- EU leaders are discussing using the profits from the frozen assets to support Ukraine’s military needs, with plans to transfer the majority of windfall profits to the European Peace Facility and a smaller portion to the regular EU budget’s Ukraine facility.
- The US is pushing for an option that maximizes revenue from the frozen assets to provide quick support to Ukraine.
Read also:
- Austrian chancellor opposes using profits from frozen Russian assets to finance weapons for Ukraine
- EU aims to send €3bn annually for Ukraine from frozen Russian assets profit
- British foreign secretary proposes to loan all frozen Russian assets in UK to Ukraine
- UK’s Sunak calls for bolder seizure of frozen Russian assets, two years into war
nNEWS
Patriots and other air defense systems are now needed in Ukraine, for our cities and communities – address by President Volodymyr Zelenskyy
21 March 2024 - 21:49
With all our partners, we are always talking about increasing our ability to defend the sky. The partners have the air defense systems that are needed for this, and they can help.
Our Europe needs real defense self-sufficiency – address by the President of Ukraine at the European Council meeting
21 March 2024 - 19:57
Dear Charles, dear Ursula, dear Roberta,
And dear colleagues!
Thank you so much! Thank you for this invitation!
Today in Ukraine we remember the battles of the beginning of a full-scale war. In particular, the battle for Kyiv. On these very days two years ago, the Russian army was stopped near our capital. Ukrainians proved then that Russian defeats are not fantasy, but a simple reality that can be ensured.
We have to be clear about our common European goal now. It is the same as it was from the beginning. Putin’s system must lose in this war against Ukraine.
This is Russia’s war not only against Ukraine, but against all of us,
against your countries as well,
against our entire Europe and the European way of life.
Putin is trying to expand the opposite system – the opposite of the European system.
- In his system, human beings do not matter at all.
- Human rights, the dignity of all communities in society, equality of peoples – all this simply does not exist under Putin’s system.
- He has armed his system.
- He put all the resources of Russia at its service.
- And he threw it into war.
- And he must lose.
- This is a matter of life and death for everything that is valuable to us in Europe.
- Nowhere in Europe should violence and degradation prevail, as it does in Russia.
Last night, there was another missile attack against Kyiv. We shot down 31 Russian missiles, including ballistic. We in Ukraine greatly appreciate all the support to our defense.
All the air defense provided to Ukraine, in particular by European countries, keeps our cities and villages alive. But the existing air defense systems are not enough to protect our entire territory from Russian terror.
And it’s not a matter of hundreds of systems, but of an achievable number – to protect all the territory of Ukraine.
You all know what steps need to be taken. I urge you to help to protect our cities – Kharkiv, Sumy, Dnipro, Odesa, Kherson and others.
We need to give reliable protection to the skies above the frontline.
We need to make Putin lose the battle for the Ukrainian sky, and if he does – he will lose the land as well.
2 Second. Ammunition is also a vital issue.
I am grateful for the creation of the Ukraine Assistance Fund amounting to 5 billion euros and for the support of Czechia’s initiative to purchase shells for our soldiers.
This will help. Thank you. Unfortunately, the use of artillery at the frontline by our soldiers is humiliating for Europe in the sense that Europe can provide more. And it is crucial to prove it now. Because if there is enough support for Ukraine, it will show Putin’s buddies that there will be enough support even if this insane person orders the expansion of aggression to other European countries. We should not anticipate what Putin has in store for the Baltics or other parts of Europe if we can destroy his aggressive potential now.
3 Third. I hope we can all agree that our Europe needs real defense self-sufficiency.
This can only be achieved by increasing the production of weapons and ammunition on the continent.
Ukraine demonstrates that it can be done quite quickly.
Please do not waste the time needed to activate defense production.
The technological side of warfare is being updated, and we need to keep up with these changes for the security of each and every European country.
We also welcome the EU’s initiative to open a Defense Innovation Office in Kyiv.
And we also offer to invest in our production of drones – one of the key types of weapons in modern warfare.
The potential of our drone production is sufficient.
And sufficient funding is needed to realize this potential on the frontline.
Everything we build to protect Ukraine will also work to protect our entire Europe.
4 Fourth. 
We must remember that Russia’s anti-European actions require not only military but also economic and political consolidation.
We in Ukraine cannot accept the fact that the background for Russian terror is the pressure on our country in trade issues.
I am grateful to all those in Europe who also see this pressure as unacceptable.
Now, the issue of trade – in particular the continuation of the trade liberalization regime with the EU, is not just about certain goods but about the ability to withstand Russian aggression.
Any loss in trade is a loss of a resource that stops Russia.
I propose that we also look at this from an economic perspective.
Every single word of Ukraine is backed by facts.
Our grain is important for the southern part of the EU, namely for the agricultural sector in Spain and Italy.
Our sugar is needed for the Romanian market. Similar facts can be noted for other categories of goods.
Over the past year, we have done and are now doing everything to restore the normal volume of our food exports from the ports of Odesa, as well as through the Danube region and Romanian ports. Ukraine has once again become a donor of food security for our traditional export destinations – North Africa and Asia. Europe will benefit from all of this – from cooperation with Ukraine and from our economic opportunities that stabilize parts of the world neighboring Europe.
At the same time we see that, unfortunately, Russian access to the European agricultural market is still unrestricted. And when Ukrainian grain is thrown on the roads or railway tracks,
Russian products are still being transported to Europe, as well as goods from Putin’s controlled Belarus.
This is not fair. It is even more unfair when someone tries to break down systematic trade solutions that have been in place for years and work for the strength of the whole Europe. Attempts of trade separatism within Europe weaken the entire continent.
I would also like to focus on joint political actions – on the issue of starting real negotiations on Ukraine’s accession.
This is one of the key elements in motivating our people in the fight against Russia – Ukrainians need to see the EU getting closer.
And especially during these difficult months, we need a sense of convergence between Ukraine and the EU – when Russia is broadcasting to the world that the West is not able to support us in the way we need, and there are such deficits in defense supplies.
Ukraine is fulfilling its part of the commitments to internal transformation, and we know that the EU has a negotiating framework ready for your consideration. Its approval could greatly support our people and send the right signal to the whole of Europe after the European Parliament elections in June.
> serve to rebuild Ukraine after the hostilities,
And the last – fifth. We need progress on the fair use of Russia’s frozen assets. The aggressor should pay the highest price for the war – this is in line with both the letter and the spirit of the law.
- This year, we must use Russian assets to protect and restore life in Ukraine, which the aggressor is destroying.
> serve to rebuild Ukraine after the hostilities,
> support Ukraine, and,
> in part, purchase weapons to stop the terror.
Russia must feel the real cost of war and the need for a just peace.
Thank you very much! Thank you, Charles, Mr. President, for your leadership!
Слава Україні!
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