• Tue. Sep 26th, 2023


All content has been processed with publicly available content spinners, ML, NLP, Ai and a hint of oregano. Not for human consumption.

Yellen Calls on Europe to Boost Ukraine Aid

BRUSSELS — Treasury Secretary Janet L. Yellen urged European nations on Tuesday to step up their spending to support Ukraine as Russia’s attacks on the country’s critical infrastructure showed few signs of abating.

The United States and Europe have coordinated closely in enacting sweeping sanctions against Russia in the nearly three months since its president, Vladimir V. Putin, ordered an invasion. But they have been less aligned on the need to help prop up Ukraine’s economy and to assist with its rebuilding once the war ends.

Congress has already approved a $13.6 billion emergency spending package for Ukraine and is expected to approve another $40 billion worth of aid. While the European Union and international financial institutions have also been making large aid contributions, Ms. Yellen said that more must be done.

“I sincerely ask all our partners to join us in increasing their financial support to Ukraine,” Ms. Yellen said in a speech at the Brussels Economic Forum, according to her prepared remarks. “Our joint efforts are critical to help ensure Ukraine’s democracy prevails over Putin’s aggression.”

The Treasury secretary is in the midst of a weeklong trip to Europe, with stops in Warsaw, Brussels and Bonn, Germany, where she will meet her counterparts at the Group of 7 finance ministers summit. Aid to Ukraine is expected to be a central topic at that meeting.

Ms. Yellen said that Ukraine’s financial needs are immediate and that it lacks funding to pay soldiers, pensioners and employees to keep its government running.

“What’s clear is that the bilateral and multilateral support announced so far will not be sufficient to address Ukraine’s needs, even in the short term,” she said.

Whether her call will be heeded remains to be seen. European nations are facing their own economic strain, including rapid inflation and soaring energy costs, and big challenges lie ahead as they look to wean themselves off Russian energy.

Ms. Yellen said that the United States would help break Europe’s dependence on Russian energy, in part by increasing American exports of liquefied natural gas. She acknowledged some climate goals to reduce emissions could be set back by the need to rely on coal and fossil fuels, but she said the current predicament should be a reminder of the need to “redouble our efforts on clean and renewable energy.”

Energy is another major issue that policymakers will discuss at the Group of 7 finance ministers’ summit in Bonn later this week. The United States is expected to press the European Union to consider alternative options ahead of its plan to phase in a Russian oil embargo by the end of the year.

Treasury Department officials said on Tuesday that they wanted Europe to consider pricing mechanisms such a price cap or tariff that would eat away at much of Russia’s oil profits while still giving the country enough incentive to keep producing.

The Treasury officials declined to share their estimates for what impact an embargo would have on the price of oil, but they said that constraining global oil supplies risked pushing prices sharply higher at a time when inflation is already running hot.

Following a meeting with Ursula von der Leyen, president of the European Commission, Ms. Yellen told reporters that she believes that tariffs on Russian oil could be enacted quickly and combined with the phaseout proposal that Europe is considering.

“They’re talking about next year as a time frame and in the meantime it might be possible to combine a phaseout with a price mechanism,” Ms. Yellen said, referring to a tariff or price cap. “It is critically important that they reduce their dependence on Russian oil; we’re very supportive of it.”

She added that the United States would help to ensure that Europe has energy supplies to meet its needs.

In her speech, Ms. Yellen said Russia’s decision to cut of gas supplies to Poland and Bulgaria should be a lesson that Western nations should not trade national security for cheaper resources. That situation has now left them vulnerable to countries that can use their abundance of natural resources to disrupt markets.

She cited China as a concern in that regard because of its supply of rare earth minerals that are used to make airplanes, cars and high-tech batteries.

“China is building a consequential market share in certain technology products and seeks a dominant position in the manufacture and use of semiconductors,” Ms. Yellen said. “And China has employed a variety of unfair trade practices in its efforts to achieve this position.”

Still, Ms. Yellen made clear that she was not calling for more protectionism or a reversal of globalization. Instead, she said, nations should not put all their eggs in one basket when it comes to international trade.

“My point is to suggest that we should consider ways to maintain free trade and at the same time lessen some of these risks,” she said.