Former Treasury Secretary Larry Summers says Ukraine's needs are 'enormously expensive' for the US to finance - and frozen Russian assets should be used instead
- Former Treasury Secretary Larry Summers called for Russia's frozen funds to be made available for Ukraine
- It would be financially and politically expensive for the US to fund Kyiv's needs, he told Bloomberg TV.
Funding Ukraine out of the US budget would be both financially and politically detrimental, former Treasury Secretary Larry Summers told Bloomberg TV.
Instead, he suggested the Biden administration could push to use Russian assets that were frozen by the West to help Ukraine build a viable economy that will help "win the peace" after the war.
"It's a very difficult budgetary time, in the United States and other major economies. What those facts say to me is that we're not going to find hundreds of billions of dollars for Ukraine in our budgets," Summers said. "And then if we find a lot of money, it's gonna be enormously expensive money, in terms of what it means politically, and in terms of what it means for the rest of the world."
Taking over the Russian funds should be achievable, and would free the US to commit its budget to other concerns, such as climate change protection, he added.
The assets, amounting to hundreds of billions of dollars in value, were first frozen by Western institutions in response to Moscow's invasion of Ukraine last year.
In February, Hermitage Capital Management CEO Bill Browder called to free up the reserves for Ukraine, determining that it could be done through collective action. A vocal critic of Russian leadership, he noted that international norms were already broken when Moscow launched a war on a peaceful state.
While legal questions remain about seizing those foreign exchange and gold reserves, Ukraine is seeking to obtain the interest that clearinghouses collect on the Russian assets.
Summers' call to use Russian assets for Ukraine comes as he has voiced concern in recent months about the trajectory of American spending, and warned against unsustainable deficits.
This fiscal year, the government is nearing $2 trillion in overspending, while US debt hit an all-time high of $33 trillion this week. Such factors could push interest higher, as servicing debt becomes more costly, he has said.