The G7 nations and the European Union are on the verge of concluding a $50 billion loan package for Ukraine, secured by frozen Russian assets, U.S. Treasury Secretary Janet Yellen announced on Tuesday. Speaking at the opening of the International Monetary Fund (IMF) and World Bank annual meetings, Yellen expressed confidence that the deal will soon be finalized, with the United States contributing approximately $20 billion. The loan is part of a broader international effort to provide financial aid to Ukraine as it continues to resist Russia’s invasion.
Yellen assured that the U.S. contribution will be repaid from the earnings on the seized Russian sovereign assets, not from American taxpayer funds. This announcement comes as the U.S. Treasury works with European allies to ensure the assets, mostly held in Europe, remain immobilized.
“We’re very close to finalizing America’s portion of this $50 billion loan package,” Yellen told reporters. The loan is expected to be secured by the end of the year, before the U.S. presidential election on November 5, where Ukraine aid has emerged as a major issue. Republican candidate Donald Trump has expressed a desire to withdraw U.S. involvement from the Russia-Ukraine war, increasing pressure on the G7 to finalize the loan before any potential policy shifts.
The U.S. had previously pushed the European Union for stronger guarantees that the frozen Russian assets, primarily held by Euroclear in Belgium, would remain blocked for an extended period, even if a ceasefire were reached. Yellen’s remarks suggest that these assurances have now been secured.
“I think the assurances are already there,” Yellen said. “We asked for some mild strengthening, but feel good that this is a secure loan that will be serviced by Russian assets, by Russia and not by American taxpayers.”
Earlier on Tuesday, European lawmakers gave the green light for the bloc’s plan to use frozen Russian assets to finance a loan of up to 35 billion euros ($38 billion), the bulk of the G7’s $50 billion package. The funds are intended to support Ukraine’s war-torn economy, while reducing the financial burden on contributing nations. Yellen emphasized that no significant obstacles remain to finalizing the U.S. portion of the loan.
The initiative underscores the West’s determination to hold Russia accountable for its invasion of Ukraine by leveraging its frozen assets to rebuild Ukraine’s economy and support its ongoing war effort.
In addition to the loan, Yellen revealed that the U.S. would soon announce tougher sanctions targeting Russia’s military-industrial complex. These sanctions aim to disrupt the flow of critical inputs to Russia’s war machine, particularly from intermediary countries that have been supplying the Kremlin.
While Yellen declined to provide specifics on the upcoming sanctions, she noted that the U.S. is prepared to implement secondary sanctions on financial institutions that facilitate transactions with Russian sanctioned entities. Last year, a presidential executive order granted the U.S. Treasury the authority to cut off banks from accessing the U.S. dollar system if they engage with such entities, and Yellen said this has already deterred some of these activities.
“So, further actions of that type remain on our radar screen as well,” Yellen added, highlighting the Biden administration’s ongoing efforts to tighten the economic screws on Russia.
The $50 billion loan package reflects the collective determination of the G7 and EU to continue supporting Ukraine as the war enters its second year. The involvement of frozen Russian assets in the funding highlights an innovative approach to war reparations and conflict financing, shifting the financial burden onto Russia.
The loan’s timing is also critical, as Ukraine prepares for a long winter of ongoing conflict with no end in sight. Western nations hope that these financial lifelines will help Kyiv maintain its defense and shore up its economy in the face of relentless Russian aggression. For the U.S. and its allies, the strategic use of Russian assets sends a powerful message: Moscow will bear the costs of its war, even if indirectly.
As negotiations for the loan near completion, the world watches how this unprecedented move will impact the future of Ukraine, its war effort, and international financial practices in conflict scenarios.
