US gives $20bn to Ukraine funded by seized Russian assets
3 min read
The United States has allocated $20 billion to Ukraine, sourced from the proceeds of seized Russian assets, as part of a broader $50 billion package announced by G7 nations in June. This economic support aims to help Ukraine continue its resistance against Russia’s invasion, with the US Treasury transferring the funds to a World Bank account for Ukraine’s use. The move marks a significant step in ensuring that Russia bears the financial burden of its illegal war, rather than American taxpayers, as emphasized by US Treasury Secretary Janet Yellen.
This funding initiative comes at a critical moment, just weeks before the US presidential transition, with President-elect Donald Trump set to take office. Trump has indicated his intent to end the war in Ukraine swiftly, questioning the financial strain that continued aid places on US resources and raising concerns about the future of support to Kyiv under his administration.
The US Treasury’s announcement reveals that the $20 billion will be available for Ukraine to access through a World Bank fund. However, the funds cannot be directed towards military purposes, as World Bank-managed money is restricted to non-military expenditures. Originally, the Biden administration had hoped to allocate half of this amount for military aid, but such a move would have required approval from Congress, which has faced political gridlock, particularly in the House of Representatives. In April, after months of delays, the US approved a $61 billion military aid package for Ukraine, but that has not alleviated the urgency of finding new financial support avenues.
The $20 billion will provide crucial assistance to Ukraine in sustaining essential services and infrastructure as it continues to defend itself against Russia’s aggression. Yellen described the transfer as a “critical infusion of support,” underscoring its importance in bolstering Ukraine’s resilience.
This development is part of a broader international strategy involving the US and its allies, including the European Union, to make use of approximately $325 billion worth of Russian assets that have been frozen since the invasion began in 2022. These frozen assets are seen as a financial lever to pressure Russia, as the funds generate interest that can be used to support Ukraine. In October, G7 nations agreed to funnel the interest income—around $3 billion annually—toward financing a $50 billion credit package for Ukraine, with the expectation that payments would begin by the end of 2024.
The European Union has also committed significant support, contributing more than €18 billion, similarly funded through the proceeds of seized Russian assets. The overall goal of this funding is to ensure that Ukraine has the resources it needs to maintain vital services, such as hospitals and emergency services, while continuing its brave resistance against Russian forces.
The timing of this financial boost is especially critical given the recent developments on the ground in Ukraine. Ukrainian forces have been losing ground in key areas, particularly in eastern Ukraine and the Kursk region, where Russian forces have regained territory. Ukrainian troops have painted a grim picture of the situation, with frontlines remaining tense and uncertain. This financial aid is seen as a vital lifeline that will help Ukraine stay operational amidst these ongoing challenges, providing the necessary resources to keep critical services running even as the war continues to unfold.
As the situation remains fluid, the US and its allies are working to ensure that Ukraine receives the support it needs to weather the storm, while simultaneously ensuring that Russia is held accountable for the destruction it has caused. The use of seized Russian assets to fund Ukraine’s needs represents a significant shift in how international financial systems are being leveraged to support a nation at war, and it underscores the ongoing global efforts to confront Russia’s actions on the world stage.
The fate of this support remains uncertain as political shifts in the US loom, but for now, the $20 billion funding serves as a critical piece of the broader strategy to aid Ukraine in its defense.
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