US Proposes Ukraine Support Using Frozen Russian Assets at G7... "Issuing $50 Billion in Bonds"

by Kwon Haeyoung

Published 22 Mar.2024 03:54(KST)

Updated 22 Mar.2024 04:18(KST)

EU Leaders to Discuss US Proposal

The U.S. Biden administration has proposed to the Group of Seven (G7) issuing bonds worth $50 billion (approximately 66.58 trillion KRW) using Russia's frozen assets to support Ukraine.

[Image source=Yonhap News]

On the 21st (local time), Bloomberg News, citing anonymous sources, reported that the U.S. is actively considering a plan to support Ukraine by placing $280 billion of Russia's central bank assets frozen by the G7 and the European Union (EU) into a special purpose vehicle (SPV), and issuing bonds based on these assets to raise funds.

Currently, two-thirds of Russia's frozen assets are under EU jurisdiction. The EU earns a net annual profit of $3.6 billion from these frozen assets. According to sources, it is estimated that bonds worth more than $50 billion could be issued based on the frozen assets. This amount is close to the $60 billion Ukraine support budget currently pending in the U.S. Congress.

EU leaders are expected to discuss this plan. However, some member states are cautious about using Russia's frozen assets to support Ukraine, citing concerns over legal issues, euro instability, and potential retaliatory measures from Russia.

The Biden administration insists that discussions must progress before the G7 summit to be held in Italy this June. The U.S. government has urged Congress to approve the Ukraine support budget since the end of last year, but the bill has not passed the U.S. House of Representatives. As the war prolongs and the tide turns in Russia's favor, the need to support Ukraine is increasing. Ukraine failed in its major counteroffensive last summer, and there are concerns that Vladimir Putin, who secured a fifth term as president, will strengthen the offensive against Ukraine while accumulating justification for the war.