The G7 countries tried on Thursday (December 19th) to complete a new round of funding to cover Ukraine’s budget, without overlooking the global economic consequences of the war launched by Russia.
Meeting in Königswinter in West Germany, the economy ministers of the seven most industrialized countries in the world (USA, Japan, Canada, France, Italy, UK and Germany) began calculating how much each could contribute in a short time. term.
On the US side, the huge aid package of 40 billion US dollars announced last week for Ukraine should be allocated approximately 7.5 billion US dollars to the country’s budget in the short term. Germany announced a contribution of one billion euros today.
The most urgent thing is to give liquidity to Ukraine for the current quarter.
“We are collecting different promises of direct assistance from Ukraine to continue to finance state functions with our own means,” said German Finance Minister Christian Lindner, whose country is chairing the G7 this year.
Lindner said he expects “further progress” and additional commitments before the meeting ends on Friday. The goal is to raise more than 10 billion euros for Ukraine.
Kyiv calculates that it needs $5 billion per month to sustain the country’s economy.
– Avoid ‘permanent’ inflation -“Ukraine needs […] “For now and with our help,” said US Treasury Secretary Janet Yellen when she arrived in Königswinter.
On Wednesday, the European Commission proposed “new macro-financial assistance” to Ukraine “up to 9 billion euros”, about $9.4 billion this year.
The ratio of loans and direct aids in this new support package will be on the agenda of the G7 discussions.
The British government said this Thursday it plans to give £50m (€59m) to Ukrainians through the European Bank for Reconstruction and Development (EBRD) to guarantee their electricity supply.
The Russian offensive caused a sharp increase in the prices of energy, raw materials and agricultural products in all world markets.
But a “clear signal” from policymakers is needed to prevent inflation from becoming a “persistent problem” for the economy, according to Lindner.
The price boom is particularly evident in developing countries and increases the risk of a food crisis in many parts of the world.
“We see serious economic consequences, especially for low-income countries,” the German economy minister said. Said.
– Call to China – As 60% of low-income countries are over-indebted or at risk of falling into this situation, Christian Lindner asked China, “one of the world’s main creditors”, for “more transparency” in lending to the poor. countries.
“Beijing has always been very quiet about this. This can no longer be justified: we need to quickly know who owes it and how, in order to better coordinate aid to these countries”.
Yellen stressed in Königswinter that the discussions on the reconstruction of Ukraine in the long term “have only just begun”. However, there is already talk of the possibility of using Russian assets frozen by Western sanctions.
Germany believes this is a “politically conceivable” scenario, but stressed that, like France, there are many legal hurdles.
“We need to carefully examine the limitations,” the French finance ministry said.
The war initiated by Russia is expected to cause a major contraction in Ukraine’s economy, which is estimated at 30% by the EBRD and up to 45% by the World Bank.
source: Noticias
