Yellen visits Kyiv, reaffirms U.S. support for Ukraine
U.S. Treasury Secretary Janet Yellen made an unannounced trip to Ukraine to reinforce the Biden administration’s support and highlight the economic aid that’s helping keep the embattled nation’s schools, hospitals and other essential services running as Russia’s invasion enters its second year.
Coming a week after President Joe Biden’s surprise visit to the capital, the trip by Yellen — arriving by train Monday under similar secrecy — is intended both to emphasize globally Washington’s commitment to Ukraine and demonstrate back home why the country needs billions of dollars in non-military aid.
Both Biden and Yellen have said Washington will back the eastern European nation “as long as it takes,” while polls show rising skepticism among Americans about the cost and some Republicans in Congress call for more scrutiny of U.S. assistance.
Without such funding, Ukrainians “wouldn’t be able to have kids who continue to go to school, whose parents continue to go to work,” Yellen said in an interview with Bloomberg News before her trip. “They wouldn’t be able to finance first responders and hospitals, and provide the core government services that are utterly necessary to enable the country to function.”
Yellen, who entered the capital Kyiv as sirens still sounded after overnight Russia drone attacks across the country, met with President Volodymyr Zelenskyy and Prime Minister Denys Shmyhal. She also visited with teachers and administrators at a school damaged by a missile strike in the first month of the war, whose salaries are funded with direct budgetary assistance from the US.
There, she announced the disbursement of the first $1.25 billion in fresh economic assistance, out of a total $10 billion pledged by the administration. The United States has already provided almost $50 billion to Ukraine, mostly in military aid, she said.
Yellen also laid a wreath at a memorial wall in honor of those who died in the war, and spent several minutes looking at destroyed Russian tanks and artillery on display.
Money ‘well spent’
“It’s really important that Americans understand that we need to provide defense-related goods, but they also need to understand that this is a country that needs and is benefiting from economic aid, and that it’s money that’s well spent,” she said earlier in the interview.
Yellen has praised the Ukrainian government for its work over the past year and its focus on fighting corruption, saying Monday that Zelenskyy’s commitment to using international assistance responsibly is “essential.” The government’s competence in managing finances and the economy “is, frankly, exemplary,” she said in the interview.
Ukraine has relied on a combination of foreign and local sources to finance its wartime budget after the invasion in February last year dealt an unprecedented blow to the economy. Russia regularly targets civilian infrastructure in a bombing campaign that has left millions of people and businesses without reliable supplies of electricity, heat and water. The budget shortfall may reach about $38 billion in 2023, Shmyhal said last week.
“We are committed to providing you with the security assistance you need to defend your country,” Yellen said in her meeting with Zelenskyy, according to a copy of her remarks provided by the Treasury Department. “But we also know that resistance on the frontlines isn’t possible without a strong and stable homefront: an economy that functions, and a government that continues to provide vital services.”
Also during the day Yellen met with first responders, as well as with Ukraine’s central bank governor and finance minister, before boarding the train back to Poland in the early evening.
International support
At the Group of 20 meetings last week in Bengaluru, India, Yellen stepped up calls for other nations to provide financial support for Ukraine and urged the International Monetary Fund to move swiftly toward a fullfledged program for the country. The G-20 meeting failed to agree on a consensus statement due to an impasse over language on Russia’s war in Ukraine.
The IMF and Ukraine have been exploring a multiyear aid package worth as much as $16 billion to help cover the warbattered country’s needs and provide a catalyst for additional international funding. Group of Seven nations urged the IMF to complete talks on a program for Ukraine and hope to see a deal for fresh financing by the end of March.
Yellen has discussed the lending program with IMF Managing Director Kristalina Georgieva in recent days. Treasury and IMF teams are in daily contact, according to a person familiar with the talks.