Finance ministers at the Group of Seven’s gathering in Germany ended a summit on Friday agreeing to take limited but concrete steps to deepen economic cooperation and respond together against Russia’s invasion of Ukraine.
At the G-7 wealthy democracies’ conference, attended virtually by Ukraine’s prime minister and finance minister, nations also committed US$19.8 billion in financial support for Ukraine to keep its government and basic services operating.
“We will continue to stand by Ukraine throughout this war and beyond and are prepared to do more as needed,” the communiqué of G-7 finance ministers and central bank governors said. “We are working closely with Ukraine to safeguard its macroeconomic stability in face of the challenges posed by Russia’s war of aggression, massive destruction of critical infrastructure and disruption of traditional shipping routes for Ukrainian exports.”
Their host, German Finance Minister Christian Lindner, whose nation holds the revolving G-7 presidency, said the financial package, prepared with the support of other international organizations, aims to provide Ukraine with the financial means to continue functioning effectively in the foreseeable future.
Earlier today, the @G7 health and finance ministers discussed strengthening global #HealthFinancing at a joint working session. Key items were the central role & financial strengthening of @WHO, as well as new financing mechanisms for pandemic control. #G7GER pic.twitter.com/OvRqtn2KPb
— BMG (@BMG_Bund) May 20, 2022
Disproportionate effects
Financial leaders from the G-7 nations — Canada, France, Germany, Italy, Japan, United Kingdom and United States —met at a time of skyrocketing food and energy prices brought on by a web of factors such as the coronavirus pandemic, global supply chain woes, inflation and the war in Ukraine. Developing nations face widespread hunger and debt, while central bankers move to raise interest rates at the risk of recession.
“Russia’s war of aggression is causing global economic disruptions, impacting the security of global energy supply, food production and exports of food and agricultural commodities, as well as the functioning of global supply chains in general,” said the G-7 finance leaders. “The economic costs of the war are felt disproportionately by vulnerable groups across all economies and particularly by those countries already facing food insecurities and elevated debt levels as consequences of the pandemic.”
Last year, they agreed to set a global minimum corporate tax of at least 15 percent in an effort to recoup a greater portion of income that multinational businesses stash away in low-rate nations and tax havens. The deal is to be put in place by next year, but at this latest meeting its chief proponent, U.S. Treasury Secretary Janet Yellen, met with some resistance because of global financial concerns.
