Janet Yellen: Send the frozen 300 billion $ of the Russian Central Bank to Ukraine

US Treasury Secretary Janet Yellen today expressed the strongest public support to date for the idea of permanently confiscating approximately $300 billion in frozen assets of the Central Bank of Russia and help Ukraine

by Sededin Dedovic
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Janet Yellen: Send the frozen 300 billion $ of the Russian Central Bank to Ukraine
© Scott Olson / Getty Images

The United States Treasury Secretary, Janet Yellen, strongly emphasized the need for a long-term strategy regarding the frozen assets of the Central Bank of Russia, estimated at around 300 billion dollars, which would be directed towards supporting Ukraine in its reconstruction process.

Her statement at a meeting of a support group for Ukraine, held Tuesday in Sao Paulo, Brazil, represents a key step toward global engagement in resolving the crisis between Russia and Ukraine. Yellen's support for the idea of using frozen funds for the reconstruction of Ukraine would be a heavy blow for Russia and Putin, which would certainly increase aggression against Ukraine.

However, Yallen emphasizes that it is not so important anymore, because then Ukraine would have enough strength to fight against a far superior opponent. She emphasizes that there is a strong international consensus on this issue, not only on a legal and economic level, but also on a moral level, which further strengthens the case for taking action.

Mrs. Yallen proposed this proposal before, but there was no agreement among all the participants in the negotiations, but it seems that has changed. The total amount of frozen assets, which resulted from the sanctions imposed on Russia for its invasion of Ukraine, exceeds hundreds of billions of dollars.

These huge sums remain unused while the war in Ukraine continues, placing a burden on all countries involved in this crisis. The question of the legality of diverting these funds in favor of Ukraine remains a key point of discussion among officials from different countries.

This was a stumbling block in the original intentions to use these funds to help Ukraine, but if it was a counter-response to Vladimir Putin's bloody campaign of conquest, it would give such a procedure legality and legitimacy.

Civilians take part in a military training activity day conducted by the Ukrainian Volunteer Army on February 17, 2024 in Kyiv,© Chris McGrath / Getty Images

Dollar position

Recently, the idea of using Russia's frozen funds has gained more supporters, especially due to the growing uncertainty regarding the continued funding of Ukraine by allies, while the US Congress faces obstacles in providing further support.

However, there are concerns that such use of financial resources as leverage could have adverse consequences for the US dollar's status as the world's leading currency. This dilemma raises the question of the long-term consequences that such a strategy could have on the global economic balance.

However, that money would be spent on the purchase of weapons from the USA and other NATO countries, so the procedure could be justified. Yellen's analysis of the potential consequences of using frozen aid to Ukraine shows that it would send a strong signal to Russia that prolonging the conflict is not a viable solution.

Her opinion is that this could motivate Russia to actively negotiate a peaceful solution with Ukraine. However, there are also concerns that such an approach could destabilize the US dollar's position as the world's leading currency, especially if financial instruments are used as weapons in geopolitical conflicts.

But he is most worried about what Putin's answer would be, because he probably would not remain in debt if someone spends over 300 billion dollars of the Russian Central Bank, especially since it is for the purpose of fighting against Russia.

The introduction of regulations by the European Union that enables the allocation of extraordinary profits from the frozen assets of the Central Bank of Russia represents a positive step in this process. It creates a framework for international cooperation in solving the crisis, showing the unity of the member states in support of Ukraine, which was not the case before.

However, primarily due to Germany and France and their influence, a consensus was created in Europe. The EU seems to have started to fear for its security because Putin continues to conquer, and who knows how far he will go.

Germany is aware that some parts of their territory were once under the administration of Russia, so Putin could claim on that basis that he has the right to those "Russian-Slavic lands" as well. Brazil, which currently chairs the Group of 20, has a key role in coordinating the international community's efforts on this issue.

The meeting of finance ministers was just the beginning of a broader dialogue that will continue at the G20 summit in Rio. In addition to the issue of support for Ukraine, topics such as poverty reduction, climate change and regional conflicts, including the situation in the Gaza Strip, are also on the agenda.

The summit in Rio, scheduled for November, represents a key moment in which G20 leaders will have the opportunity to make concrete decisions and agree on action plans to solve current global challenges. It is expected that the issue of Russia's frozen assets will be one of the central topics of the discussion, while the best way to use them to support peace and stability in the region will be sought.

However, November is far away, spring is slowly coming in Ukraine, and it is likely that Putin will try to advance when the weather improves because the morale of the Ukrainian army is very low. The blocking of American aid in Congress and the fall of Avdiivka, which was a symbol of resistance, dealt a heavy blow to Ukraine.

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