Yellen calls on allies to increase funding for Ukraine

U.S. Treasury Secretary Janet Yellen testifies during a U.S. House Financial Services Committee hearing on the Financial Stability Oversight Board’s annual report, on Capitol Hill in Washington, DC, USA United, May 12, 2022. Saul Loeb/Pool via REUTERS

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BRUSSELS, May 17 (Reuters) – U.S. Treasury Secretary Janet Yellen on Tuesday called on U.S. allies to step up their financial support for Ukraine, saying the funds announced so far would not be sufficient for the needs at short term of the country as it fights against a Russian invasion. .

“Ukraine’s financing needs are significant,” Yellen said in prepared remarks for the Brussels Economic Forum, adding that the country’s government continues to function, thanks to the ingenuity and courage of its officials.

“In the months between resuming tax collection, Ukraine needs budget funding to pay soldiers, employees and pensioners, as well as to run an economy that meets the basic needs of its citizens. “Yellen said. “In a short time, he will have to turn to repairing and restoring critical utilities and services.”

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While Ukraine would ultimately need ‘massive support’ for reconstruction and recovery on the scale of the Marshall Plan for Europe after World War II, the country should do this ‘one step at a time’ .

“What is clear is that the bilateral and multilateral support announced so far will not be enough to meet Ukraine’s basic needs,” Yellen said.

With the war having shut down up to half of Ukraine’s economy, the country needs short-term external financing of about $5 billion a month to meet its basic needs, according to Ukrainian President Volodymyr Zelenskiy and the International Monetary Fund.

The European Union is set to offer a new loan package to Ukraine on Wednesday to provide immediate liquidity, as well as commitments for longer-term reconstruction. While the short-term package is still being worked out, two officials with knowledge of the talks told Reuters they expect it to roughly cover Ukraine’s financial needs for two months. Read more

Yellen called on allies to “join us in increasing their financial support for Ukraine” as the US Senate moves closer to passing a $40 billion military and humanitarian aid spending package for the war-torn country. Read more .

TAX WORK NEEDED

Yellen also said more work is needed to get a global deal on corporate tax reform over the finish line. This would include resolving disagreements over the design of the “pillar 1” plan to reallocate certain taxing rights on large, highly profitable multinationals to the “market countries” where their services and products are sold.

The Treasury Secretary made no breakthrough on Monday in persuading Polish officials to adopt the EU’s implementation plan for ‘Pillar 2’ of the 15% overall minimum corporate tax, but s is committed to continuing to work on the issue. Read more

“And on Pillar 2, the EU and the US must show leadership by quickly implementing the global minimum tax into our national laws,” Yellen said.

She also said the United States is committed to helping meet European energy needs as Europe tries to break its dependence on Russian oil and gas.

She called on Europe, the United States and other allies to also unite to reduce their dependence on China for critical materials such as rare earth metals and to diversify supply chains. supply.

Yellen said with less available Russian energy due to embargoes or supply cuts, there would likely be a near-term increase in the use of coal and other fossil fuels. “And if that dulls some of our immediate climate goals for a short time, let it also spur us to redouble our efforts on clean, renewable energy.”

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Reporting by David Lawder; Editing by Bradley Perrett

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