World

UKRAINE UPDATE: 21 MARCH 2024

US backs $50bn bond for Kyiv using profits generated by frozen Russian sovereign assets

US backs $50bn bond for Kyiv using profits generated by frozen Russian sovereign assets
A child wearing a headband with the words ‘Al-Aqsa storm’ next to soldiers on guard during a Houthi protest in against raids by US and UK aircraft after Houthi attacks on shipping in the Red Sea and Gulf of Aden. (Photo: Mohammed Hamoud / Getty Images)

The US proposed to its Group of Seven allies that they create a special purpose vehicle to issue at least $50bn of bonds backed by the profits generated by frozen Russian sovereign assets and use the proceeds to support Ukraine, according to people familiar with the plan.

The United Nations’ nuclear watchdog cautioned there was no quick way to loosen Russia’s grip on nuclear supply chains and threatening to sever ties too soon would harm global energy markets. 

The Yemen-based Houthis have told China and Russia their ships can sail through the Red Sea and Gulf of Aden without being attacked, according to several people with knowledge of the militant group’s discussions.

US backs $50bn Ukraine bond using frozen Russia assets

The US proposed to its Group of Seven allies that they create a special purpose vehicle (SPV) to issue at least $50-billion of bonds backed by the profits generated by frozen Russian sovereign assets and use the proceeds to support Ukraine, according to people familiar with the plan.

The proposal would pool the $280-billion of Russian central bank assets that have been immobilised by G7 countries and the European Union in the SPV, the profits of which would back the so-called freedom bonds, said the people, who spoke on the condition of anonymity.

More than two-thirds of Russia’s frozen assets are blocked in the EU, where they generate about $3.6-billion of net profits a year. Proceeds from the prospective bond offering would nearly equal the $60-billion of US aid that is still stuck in Congress.

Western allies are struggling to get funding to Kyiv at a critical moment in the war, as Ukrainian troops face artillery shortages and Russia has made advances in the east. EU leaders meeting in Brussels on Thursday discussed how to use profits from the frozen Russian assets to help Ukraine.  

Discussions were at an early stage and were ongoing, one of the people said. Some G7 nations including Germany and France expressed caution over the new idea, said another person.

Russia’s nuclear supply chain gets a pass at global summit

The United Nations’ nuclear watchdog cautioned there was no quick way to loosen Russia’s grip on nuclear supply chains and threatening to sever ties too soon would harm global energy markets. 

European countries and the US have attempted to pivot away from Russian inputs in the wake of President Vladimir Putin’s two-year war on Ukraine. Kremlin-controlled Rosatom is the world’s dominant supplier of nuclear fuel and the top exporter of reactors.

But at a nuclear energy summit convened on Thursday in Brussels, the head of the International Atomic Energy Agency cautioned against politicising the technology.

“I would warn against this point of good nuclear energy against bad nuclear energy,” International Atomic Energy Agency Director-General Rafael Mariano Grossi said. “I don’t think this is what we need to have in the global energy market.”

New data published last week showed Russia’s nuclear-fuel trade rising to a record in 2023, even as the US and Europe have tried to clamp down on its oil and gas supplies. While French President Emmanuel Macron has traded military threats with Putin, last year his engineers at state-controlled Framatome formed a joint venture with Rosatom to plot the future of their atomic industries.

The nuclear industry had to adapt supply chains as fast as possible to disconnect from Russian supply, but doing so in a safe and secure way would take time, said Belgian Prime Minister Alexander De Croo. 

“We need to balance things,” he said. “We need to make sure our nuclear power plants can continue.”

Yemen’s Houthis tell China, Russia their ships won’t be targeted

The Yemen-based Houthis have told China and Russia their ships can sail through the Red Sea and Gulf of Aden without being attacked, according to several people with knowledge of the militant group’s discussions.

China and Russia reached an understanding following talks between their diplomats in Oman and Mohammed Abdel Salam, one of the Houthis’ top political figures, said the people, who asked not to be named discussing private matters.

In exchange, the two countries may provide political support to the Houthis in bodies such as the United Nations Security Council, according to the people. It’s not entirely clear how that support would be manifested, but it could include blocking more resolutions against the group.

Spokespeople for the governments of China and Russia, as well as the Houthis, including Abdel Salam, didn’t reply to Bloomberg’s requests for comment.

While the Houthis have already signalled Moscow and Beijing’s assets would not be targeted, the talks underscore the increased nervousness among world powers about the group’s missile and drone attacks in and around the southern Red Sea since mid-November.

The Houthis, an Islamist group, say they’re targeting ships linked to Israel, the US and UK. Yet they appear to have misidentified some vessels and Russia and China may have wanted stronger assurances from the group.

Ostensibly, the assaults are to put pressure on Israel to stop its war in Gaza against Hamas, though many analysts doubt the Houthis would end their campaign in the event of a ceasefire or permanent peace deal. 

Both China and Russia are diplomatic and economic partners of the Houthis’ main military and financial backer, Iran. Most Iranian oil exports go to China and the Islamic Republic has, according to the US and European Union, provided drones and other weaponry to Russia for its war in Ukraine.

Russia cancels space launch with ISS crew seconds before start

Russia cancelled a Soyuz rocket launch carrying a crew to the International Space Station just before it was due to take off, Interfax reported, citing a broadcast by the Roscosmos space agency.

The Soyuz MS-25 mission was postponed after an automated abort command at the Baikonur spaceport in Kazakhstan, the news service reported on Thursday, citing Roscosmos. Russian commander Oleg Novitskiy, Nasa astronaut Tracy Caldwell Dyson and Belarusian Marina Vasilevskaya were on board.

Nasa said in a post on X that the take-off was aborted at the 20-second mark and that “the spacecraft and crew remain safe”. It wasn’t immediately clear why the mission was postponed. 

Macron’s boxing pose drives home tough stance on Putin

Macron’s latest Raging Bull-style portraits show him adopting the kind of imagery often used by autocrats after he ramped up his rhetoric against Putin’s actions.

The black and white photos, posted on Instagram by his official photographer Soazig de La Moissonnière, show the president in a black T-shirt, his jaw clenched, hammering a heavy bag.

The photos underscore the hawkish posture that Macron has adopted against Russia as well as the pressure he has been putting on other European countries to take a stronger stance to support Kyiv. France agreed with Germany last week to start producing weapons in Ukraine.

The photos follow a television interview last week in which Macron warned that the European Union would face an “existential” threat of a Russian invasion unless Putin’s forces were defeated in Ukraine.

“It’s aimed at Putin, and also at those who could bring some French flair to this clash,” political consultant Philippe Moreau-Chevrolet told Le Parisien newspaper. He noted that they also recall many of Putin’s own strongman photos. “This is a PR aesthetic usually used by authoritarian regimes, but this is one of the first times we’re seeing this type of clash posture done by a truly democratic head of state.” DM

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Comments - Please in order to comment.

  • John P says:

    “Western allies are struggling to get funding to Kyiv at a critical moment in the war,”.
    No, Trump is deliberately stalling funding for his own political gain.

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