Yellen Says Ukraine Need, Not US Election, Driving Aid Talks

Viktoria Dendrinou
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(Bloomberg) -- Treasury Secretary Janet Yellen said the US push to tap frozen Russian assets for Ukraine’s benefit isn’t driven by the looming presidential election in November, but by Kyiv’s needs.

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“I’ve been saying for a long time, not because of the election, but because Ukraine’s needs are very substantial, that it’s important to show that we have a way of channeling substantial additional aid to Ukraine,” Yellen told reporters Tuesday in Frankfurt, Germany.

She added that Group of Seven leaders will “hopefully” be able to endorse a plan now in the works at their summit in Apulia, Italy, June 13-15.

“It’s not that every detail needs to be worked out,” she said. It “would be very nice to be able to get, at the political level, an agreement on an approach.”

Read More: Germany Warms to US Plan to Tap Russian Assets for Ukraine

Discussions on how the US and its allies can tap the value of frozen Russian assets are expected to dominate meetings among Yellen and other G-7 finance ministers in Stresa, Italy, starting Thursday.

The US has proposed the group leverage the future revenue generated from about $280 billion in Russian central bank funds — most of which lies immobilized in Europe — to back a $50 billion aid package for Ukraine.

Earlier on Tuesday, in an interview with Sky News, Yellen said the plan “would essentially bring forward that flow of interest proceeds” that the assets are currently generating at the Belgium-based clearinghouse Euroclear.

In a step that could prove crucial to securing European backing, German officials have said they are ready to support the plan, according to people familiar with the discussions.

Sanctions talks

Yellen delivered a speech in Frankfurt Tuesday on the importance of the Atlantic alliance in maintaining security and economic growth throughout the world. She also met with European banking executives to discuss ways to limit sanctions evasion by Russia, as well as efforts to combat terrorist financing.

She said she spoke with the bankers about the fact that certain sanctioned goods are still reaching Russia.

“We even see some evidence of European and American firms that are selling goods that, maybe through some circuitous, global route, are making their way there,” she said. “So we discussed sanctions enforcement, and possible steps that we could take to tighten the way in which sanctions are levied.”

--With assistance from Tom Rees.

(Updates with additional Yellen comments from seventh paragraph.)

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