9th Dec 2023

US backs EU windfall tax on frozen Russian assets

  • Janet Yellen has been a strong supporter of using Russian assets for the rebuilding of Ukraine (Photo: World Bank)
Listen to article

In her strongest wording on the subject yet, US treasury secretary Janet Yellen said she supported a European proposal to use the hundreds of billions of seized Russian assets currently held by G7 countries.

"I also support harnessing windfall proceeds from Russian sovereign assets immobilised in particular clearing houses and using the funds to support Ukraine," she told reporters at a press conference in Marrakech on Wednesday (11 October).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Speaking at the start of annual meetings of the International Monetary Fund and the World Bank, she added that "we must continue to impose severe and increasing costs on Russia and continue efforts to ensure that Russia pays for the damage it has caused."

Currently, more than €200bn in Russian assets sit in clearing houses such as the Belgium-based Euroclear, which has already earned €1.5bn in interest over the €141bn it currently holds, in part due to proceeds gained from reinvesting those funds.

The European Commission has discussed options to transfer interest income to Ukraine to support the war effort. But so far efforts have been bogged down by legal uncertainty and political disagreement.

France and Germany have both resisted EU plans to tax the frozen assets, while European Central Bank president Christine Lagarde warned that it could undermine the Eurozone's financial stability.

In March, a joint report by Kyiv, the European Commission, the World Bank, and the United Nations estimated that rebuilding infrastructure in the war-torn country will cost €400bn.

EU officials have estimated that the windfall profit from Russia's frozen assets in Europe could provide €3bn a year to rebuild Ukraine.

Yellen's comments come as US financial aid to Ukraine is increasingly subject to political wrangling and bickering.

Speaking alongside Nato chief Jens Stoltenberg during a surprise visit to Brussels on Wednesday, Ukrainian Volodymyr Zelenskyy said that Ukraine "needs some support from the leaders. That is why I'm here today."

Last week, EU foreign ministers had already travelled to Kyiv to dispel rumours that EU and US support is wavering.

Yellen, on Wednesday, seemed to do the same. "I want to be clear that we cannot allow our support to Ukraine to be interrupted," she said.

EU not doing enough to help Ukraine, Yellen says

EU must increase funding to "help ensure Ukraine prevails over Putin's aggression," US treasury secretary Janet Yellen said in Brussels — but some EU leaders are starting to sound less warlike and have instead called for an early peace.


Slovak's 'illiberal' Fico victory boosts Orbán, but faces checks

Fico has the potential to shift Slovakia from the West and jeopardise the EU unity in its stance against Russia's Ukraine war. His victory could also have a domino effect in central Europe and empower of other far-right, populist movements.

Global 'billionaires tax' could raise €236bn, report finds

The EU-funded research lab proposes a global minimum two-percent annual tax — levied on the wealth, rather than income, of the world's 2,756 richest people (who pay far less tax than ordinary citizens relative to their income)


Can G7 make Russia pay for reconstruction of Ukraine?

While seizing Russian assets for Ukraine's reconstruction seems a logical option, it presents legal challenges and potential risks to the monetary system. Alternative approaches, such as seizing the proceeds generated by frozen assets, are being considered by Western allies.

Polish truck protest at Ukraine border disrupts war supplies

Disruption at the Polish-Ukrainian border by disaffected Polish truckers is escalating, potentially affecting delivery of military aid to Ukraine. A Polish request to reintroduce permits for Ukrainian drivers has been described as "a shot to the head" during war.


Tusk's difficult in-tray on Poland's judicial independence

What is obvious is that PiS put in place a set of interlocking safeguards for itself which, even after their political defeat in Poland, will render it very difficult for the new government to restore the rule of law.


Can Green Deal survive the 2024 European election?

Six months ahead of the EU elections, knocking an 'elitist' climate agenda is looking like a vote-winner to some. Saving the Green Deal and the EU's climate ambitions starts with listening to Europeans who are struggling to make ends meet.

Latest News

  1. How Moldova is trying to control tuberculosis
  2. Many problems to solve in Dubai — honesty about them is good
  3. Sudanese fleeing violence find no haven in Egypt or EU
  4. How should EU reform the humanitarian aid system?
  5. EU suggests visa-bans on Israeli settlers, following US example
  6. EU ministers prepare for all-night fiscal debate
  7. Spain's Nadia Calviño backed to be EIB's first female chief
  8. Is there hope for the EU and eurozone?

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Join EUobserver

Support quality EU news

Join us