The G7 has agreed to $ 18.4 billion to maintain Ukraine’s operations and is more prepared

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Königswinter — Group of Seven financial leaders agreed on Thursday for $ 18.4 billion to help Ukraine pay the bill in the coming months, supporting Kyiv during the war with Russia He said he was ready to do more if needed.

Finance Ministers and Central Bank Governor – G7 – from the United States, Japan, Canada, the United Kingdom, Germany, France and Italy are struggling to fend off an attack by Russia, which was invaded by Russia on February 24, and is in action. Because there is, we are negotiating. From cash.

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“In 2022, we mobilized $ 18.4 billion in budgetary support, including a recent commitment of $ 9.2 billion,” Reuters said in a draft communiqué.

“We continue to support Ukraine during and after this war and are ready to do more if needed,” he said.

In the draft, the G7 welcomed the European Commission’s proposal to lend € 9 billion to Ukraine on Wednesday, noting that the European Bank for Reconstruction and Development and the International Finance Corporation are planning support worth $ 3.4 billion. bottom. But it wasn’t clear if these funds were part of $ 18.4 billion or something else.

Germany’s Treasury Minister Christian Lindner said earlier Thursday that Germany would give Ukraine € 1 billion, and Japan would double its aid to Ukraine to $ 600 million to meet short-term needs. promised.

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Ukraine estimates that it will need about $ 5 billion a month to pay salaries for civil servants and maintain administrative function despite the daily destruction by Russia.

The war is groundbreaking for Western nations, rethinking decades-old relations with Russia not only in terms of security, but also in terms of energy, food and global supply alliances from microchips to rare earths. I was forced to do it.

In a broader sense, G7 policy makers are addressing the question of how to curb inflation and increase sanctions pressure on Russia without causing a recession.

More and more officials have come up with the term “stagflation”. This is a horrifying 1970s combination of sustained price increases, coupled with economic stagnation.

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“The G7 Central Bank is closely monitoring the impact of price pressures on inflation expectations, will continue to properly adjust the pace of monetary tightening in a data-dependent and clearly communicated manner, and inflation expectations will remain firmly fixed. We guarantee that it will remain as it is. It will recover and limit negative cross-country spillovers. “

Long-term reconstruction

The European Commission proposed on Wednesday to establish a fund of unspecified scale subsidies and loans to Ukraine, perhaps jointly borrowed by the EU, for post-war reconstruction.

The G7 said they were supportive, but avoided details.

“We support the long-term reconstruction of Ukraine and all partners, including Ukrainian authorities and international financial institutions, to ensure that large-scale joint efforts for reconstruction are closely coordinated. We invite you to join us, “said the draft.

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Economists’ estimates of the cost of rebuilding Ukraine vary widely between € 500 billion and € 2 trillion ($ 524 billion to $ 2.09 trillion), depending on assumptions about the length of the conflict and the extent of the destruction.

At this scale, the EU is considering not only a new joint borrowing project modeled after the Pandemic Recovery Fund, but also the EU’s currently frozen Russian assets as a source of funding.

However, some countries, such as Germany, have stated that the idea is politically interesting but based on unstable legal grounds, and the G7 draft communiqué does not address this issue. ($ 1 = € 0.9550) (Additional report by Paul Carrel, Chirstian Kraemer, Leigh Thomas, Francesco Canepa, Leika Kihara, David Lawder, Jan Strupczewski, edited by Matthew Lewis, Tomasz Janowski, Hugh Lawson)