US Treasury Secretary Janet Yellen urged a gathering of European finance chiefs to move ahead with plans for €50 billion ($52.4 billion) in fresh aid to Ukraine while pledging the White House and a majority in Congress will “fight” to provide new assistance for the embattled Eastern European nation.
(Bloomberg) — US Treasury Secretary Janet Yellen urged a gathering of European finance chiefs to move ahead with plans for €50 billion ($52.4 billion) in fresh aid to Ukraine while pledging the White House and a majority in Congress will “fight” to provide new assistance for the embattled Eastern European nation.
“President Biden and I, along with a bipartisan majority of the US Congress and the American people, will fight so that our support is not interrupted and sufficient funding is in place,” Yellen said Monday in Luxembourg in a speech to the Eurogroup, a body comprised of euro-area finance ministers.
Yellen’s remarks nodded to growing worries on both sides of the Atlantic that efforts to continue offering substantial aid to Ukraine are coming under threat and may depend, in part, on the other’s ability to extend its commitments.
“For Congress to be willing to provide the level of support that we are to Ukraine, it’s important to know that we are not alone in this,” Yellen said during a news conference following her speech.
Speaking alongside her, Eurogroup President Paschal Donohoe said he and his colleagues “took great heart in the message that Secretary Yellen gave today.”
In the US, a group of Republican hardliners, many of whom oppose more Ukraine aid, recently deposed House Speaker Kevin McCarthy and pitched the chamber into a disruptive leadership struggle.
Biden is planning to make a formal request for additional foreign aid this week, including for Ukraine and Israel, but it’s unclear whether the House can act without a permanent speaker in place.
“We have been united in holding Russia to account for its illegal, unjustifiable and unprovoked war of aggression against Ukraine,” Donohoe said in a statement that preceded the meeting.
Donohoe highlighted that the current geopolitical pressures require transatlantic cooperation.
“We face challenges of a magnitude that no country, no region, can face alone,” he said. “Europe and the United States are pillars of the global economy, which makes working together so very important.”
European Commission Vice President Valdis Dombrovskis said that it’s important that the US provide clarity on Ukraine funding “as soon as possible.”
European Union leaders are slated later this month to take up the €50 billion proposal, but resistance to the size of the package has been growing on the bloc’s eastern fringe. Hungary recently proposed halving the amount and re-evaluating the plan part way through the three-year disbursement period.
Slovakian authorities this month froze military aid to Ukraine as they await formation of a new government by Robert Fico, who won elections on promises to stop supplying weapons to Kyiv.
Without referring directly to any of those developments, Yellen said it’s vital, not just for Ukraine, for the US and the EU to continue their support.
“We cannot allow Ukraine to lose the war for economic reasons when it has shown an ability to succeed on the battlefield,” Yellen said. “Our assistance is crucial to our collective national security interests and to our shared goal of a free and prosperous Europe and world.”
In addition to addressing the so-called Eurogroup, Yellen is also slated to hold talks with other senior EU officials. She’s expected to press them on ways to harmonize economic policies toward China.
The Biden administration has been seeking ways to reduce the reliance of US supply chains on Asia’s biggest economy by building trade ties with countries seen as more reliable, while also denying China’s access to advanced technologies by limiting certain investments into the country by US firms.
A senior Treasury official, speaking with reporters en route to Luxembourg, said they expect extensive discussions on outbound investment restrictions.
Yet Yellen also emphasized in her speech that such policies should be “targeted” and aimed at “safeguarding our national security interests,” and not at disrupting broader economic ties.
“We do not seek to decouple our economy from China’s,” she said. “We seek to diversify, to de-risk.”
Yellen hailed ongoing work between the US and the EU to strike a so-called critical minerals agreement. The pact — which could be finalized at a US-EU summit in Washington later this month — would allow minerals mined or processed in the EU to be used in the production of electric vehicles made in the US that qualify for tax credits.
“This joint work to fortify the supply of the digital economy’s most essential input will mitigate shocks like the one we experienced during the pandemic, and it will bolster the resilience of our economies for years to come,” Yellen said.
–With assistance from William Horobin, Kamil Kowalcze and Alessandra Migliaccio.
(Updates with Yellen comments starting in fourth paragraph, Eurogroup president comments starting in fifth paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.