KÖNIGSWINTER, Germany — The Group of 7 economic powers agreed on Friday to provide nearly $20 billion to support Ukraine’s economy over the coming months to help keep the country’s government running while it fights to repel a Russian invasion.
In a joint statement after two days of meetings, finance ministers from the Group of 7 affirmed their commitment to help Ukraine with a mix of grants and loans. Ukraine needs approximately $5 billion per month to maintain basic government services, according to the International Monetary Fund.
The $19.8 billion of financing was agreed on after the United States, which is contributing more than $9 billion in short-term financing, pressed its allies to do more to help secure Ukraine’s future. The statement did not break down how much the other Group of 7 nations will contribute.
The European Commission, however, previously agreed to provide up to 9 billion euros of financial assistance. The European Bank for Reconstruction and Development and the International Finance Corporation plan to provide an additional $3.4 billion to Ukrainian state-owned enterprises and the private sector.
“We will continue to stand by Ukraine throughout this war and beyond and are prepared to do more as needed,” the statement said.
The economic policymakers also acknowledged that more fallout from the war lies ahead, and they pledged on Friday to keep markets open as they combat rising food and energy prices around the world. They also said that their central banks would be closely monitoring inflation measures and the impact that rising prices are having on their economies.
“We are very concerned about crises and macroeconomic developments,” Christian Lindner, Germany’s finance minister, said during a closing news conference on Friday, according to an English translation.
The two-day summit on the outskirts of Bonn came at a pivotal time for the world economy, with concern mounting that a combination of war, supply chain problems and the lingering effects of the pandemic could lead to a contraction in global output. Finance ministers discussed ways to keep pressure on Russia while minimizing the damage to their economies as they debated the merits of a European embargo on Russian oil and whether seized Russian assets could be used to pay for Ukraine’s reconstruction.
“The values of the international community have been totally discarded by Russia,” Mr. Lindner said.
Officials from the world’s leading advanced economies discussed other areas for possible collaboration, such as combating climate change and making progress on a global tax agreement that was reached last year but faces implementation problems.
But the complicated mix of foreign policy challenges and economic headwinds dominated the meetings.
Treasury Secretary Janet L. Yellen warned this week that Europe could be vulnerable to a recession because of its exposure to Russian energy. She does not expect a recession in the United States but said on Thursday that a “soft landing” was not guaranteed as the Federal Reserve raises interest rates to tame inflation.
“I think it’s conceivable there could be a soft landing, that requires both skill and luck,” Ms. Yellen told reporters on the sidelines of the Group of 7 summit. “It’s a very difficult economic situation.”
By: Alan RappeportTitle: G7 nations pledge $20 billion to Ukraine.Sourced From: www.nytimes.com/2022/05/20/business/g7-20-billion-ukraine.htmlPublished Date: Fri, 20 May 2022 13:01:42 +0000