The United States is currently not joining the European Union’s initiative aimed at expanding the use of frozen assets of the Russian Federation to finance support for Ukraine by the G7 countries. This decision was voiced by American officials during meetings of the International Monetary Fund in Washington last week during discussions with their European counterparts.
This is reported by Kyiv24
Market Risks and the US Position
The reason for the US’s reluctance to join the European plan, according to sources, stems from concerns about risks to the stability of the financial market. Some interlocutors also noted that the American side is currently avoiding commitments at this stage. This position of the United States has posed a serious challenge for the EU, which is trying to engage the rest of the G7 in the plan to use frozen assets of the Russian central banks as collateral for loans amounting to up to 140 billion euros (equivalent to 160 billion US dollars) for Ukraine.
“According to one source, the US cited market stability risks as the reason for its reluctance. Another source stated that the US is simply avoiding commitments at this stage.”
Details of the European Initiative and Prospects
The European Commission is currently developing a detailed draft mechanism for using frozen Russian assets; however, its final publication is only possible after approval by the leaders of EU countries, which may occur at the upcoming summit in Brussels. Against this backdrop, the White House is intensifying efforts to find ways to end hostilities in Ukraine. Last week, President Donald Trump held a meeting with Ukrainian President Volodymyr Zelensky in Washington and announced plans to meet with Russian President Vladimir Putin in Budapest soon.
Previously, the European Commission proposed to use 175 billion euros generated from frozen Russian state assets invested in Western government bonds to provide Ukraine with a reparations loan of 140 billion euros and to settle previous financial obligations to the G7. Currently, these funds are deposited with the European Central Bank under the management of Euroclear.
Until now, Ukraine has received financial assistance from the G7 primarily through revenues generated from frozen Russian assets; however, the main amount has remained untouched. The main deterrents to using cash remain financial risks, primarily the potential destabilization of the euro exchange rate, as well as legal risks, including the likelihood of lawsuits from Moscow.