Bengaluru: The Group of Seven (G7) finance ministers has announced increasing the bloc’s economic aid to Ukraine to USD 39 billion and called upon the IMF to deliver a fresh financial package to the country by March to help it deal with the impact of the Russian invasion.
The G7 finance ministers and Central Bank governors deliberated on Ukraine’s overall economic condition at a meeting here Thursday, on the eve of the first anniversary of the Russian aggression.
The meeting was virtually joined by Ukrainian Finance Minister Sergii Marchenko.
The G7 finance ministers and Central Bank governors have come to the city for a meeting of the G20 grouping.
“We urge the IMF and Ukraine to deliver a credible, ambitious, fully financed, and appropriately conditioned IMF programme by the end of March 2023,” the G7 finance ministers said in a statement.
It said the G7, together with the international community, remained strongly committed to addressing Ukraine’s urgent short-term financing needs.
“For 2023, based on the government of Ukraine’s needs, we have increased our commitment of budget and economic support to USD 39 billion,” the G7 statement said.
“These significant commitments and their swift disbursement give Ukraine certainty and enable the authorities to safeguard the functioning of government, continue the delivery of basic services, carry out the most critical repairs of damaged infrastructure, and stabilize the economy,” it said.
The G7 comprises France, Germany, Italy, the UK, Canada, Japan, and the United States.
“Our sanctions have significantly undermined Russia’s capacity to wage its illegal war. We will continue to closely monitor the effectiveness of sanctions and take further actions as needed,” the statement said.
“We will continue to work closely together and with our partners to enforce our sanctions and prevent any attempts to evade or circumvent sanctions,” it said.
In this context, the G7 called on other countries to join the bloc’s sanctions on Russia.
“We remain determined to foster international cooperation to uphold multilateralism and address the global economic hardships caused by Russia’s war and its weaponisation of food and energy, which are disproportionately felt by low- and middle-income countries,” it said.
It said the bloc will continue its joint efforts to support and contribute to Ukraine’s repair of its critical infrastructure, recovery, and reconstruction.
“We re-emphasise our shared commitment to our coordinated economic measures in response to Russia’s war of aggression,” the G7 said. “We reject Russia’s false narrative about the spillover effects of the sanctions on food and energy security.”.
“We reaffirm that our sanction measures targeting Russia are intended not to contribute to energy and food insecurity, while these measures are tailored to reduce Russia’s ability to reap windfall profits from changes in global oil prices,” it added.
The G7 said it is making progress on the goals of the crude oil price cap policy to prevent Russia from profiting from its war of aggression against Ukraine, while supporting stability in global energy markets and limiting negative economic spillovers from the war, especially on low- and middle-income countries.
“Russia’s monthly budget gap has surged to record highs, which will significantly restrict its ability to finance its illegal war. Developing market economies can take advantage of this opportunity to access to crude oil and petroleum products at a discount to prevailing market prices,” the G7 said.
“We will continue to work closely together and with our partners to enforce the oil and petroleum product price caps and prevent attempts to evade or circumvent the measure,” it said.
It further noted that Russia’s “prolonged war of aggression” has exacerbated global economic challenges, including through adding to inflationary pressures, further disrupting supply chains and heightening energy and food insecurity.
“In addition to these negative consequences of the war, we must remain vigilant to further downside risks, including inflationary pressures, threats to financial stability, as well as capital outflows especially in developing countries amid shifting global financial conditions and potential debt crises,” it said.
