US ‘very close’ to finalizing $20B share of G7 loan to Ukraine, Yellen says

Treasury Secretary Janet Yellen said Tuesday that the U.S. was “very close” to finalizing a $20 billion contribution to a broader loan package to Ukraine that will be repaid from the income generated by frozen Russian assets.

“We’re 99 percent there and it’s nailing down just a couple of relatively small things,” Yellen told reporters. “We are very close.”

The U.S. and its allies have been trying to iron out the details of the $50 billion loan package since leaders reached an agreement at the G7 meeting in June. The deal, which came after Yellen and other Biden administration officials rallied sometimes reluctant allies around the idea, anticipated that Ukraine would receive the money by the end of the year. Yellen said that was still the goal.

The loan offers G7 nations a chance to lock in longer-term funding for Ukraine’s war effort and insulate the money from the outcome of the U.S. presidential election. Former President Donald Trump and many Republicans have been deeply skeptical of sending further U.S. assistance to Ukraine.

The European Parliament on Tuesday moved ahead with approving its own contribution to the loan of roughly $38 billion, though that share is expected to decrease with the U.S. allocation to the loan. The UK separately approved its contribution of about $3 billion.

The EU moved ahead to approve its participation in the loan without the U.S. as the Biden administration sought greater EU assurances that the Russian assets — the vast majority of which are frozen in Europe — would stay immobilized for a longer period of time. The concern was that the freeze on the assets could be ended before the G7 loan was repaid.

The EU currently needs a unanimous vote every six months to renew the sanctions that keep the Russian state assets blocked. But Hungary, whose leader Viktor Orbán is a Trump supporter and sympathetic to Russian President Vladimir Putin, had blocked changes to the EU sanctions regime that the U.S. was seeking.

Yellen said that even without those changes, U.S. officials feel confident that they can provide a $20 billion contribution to the broader $50 billion loan package.

“We have a high degree of confidence that the money will be there and will remain locked down,” Yellen said. She said the asset freeze is one component of a broader sanctions program, which she said would be “inconceivable” for any EU member to terminate while Russia’s invasion of Ukraine continues.

“The assurances are already there,” Yellen said. “We asked for some modest strengthening but feel good that this is a secure loan that will be serviced by Russian assets — by Russia and not by American taxpayers.”