G7 countries increase financial aid to Ukraine to USD 44 billion, call for end to war

Bloomberg reported the information.

"We call for an immediate end of Russia’s illegal war against Ukraine, which would clear one of the biggest uncertainties over the global economic outlook," the statement said following the meeting in Japan.

Assistance to Ukraine is planned to be increased to USD 44 billion by the beginning of 2024, which will allow the International Monetary Fund to approve the allocation of USD 15.6 billion over four years.

The ministers also emphasized the need to stay "agile and flexible" in economic policy amid heightened uncertainty in the global economy.

The central banks will "ensure inflation expectations remain well anchored and will clearly communicate policy stances to help limit negative cross-country spillovers," the communiqué says.

In addition, the finance ministers and central bankers of the US, the UK, France, Germany, Italy, Canada, and Japan agreed on positions on a wide range of issues, from banking sector problems to debt restructuring, in a lengthy communiqué.

The joint statement also expressed some support for the US desire to reduce its supply chain dependence on China, as well as an appeal to the Global South to show that the group of rich countries can take concrete steps to support them while the G20 struggles with disagreements.

Financial stability

The need to ensure global financial stability has become a leading theme since the collapse of the Silicon Valley banks and First Republic Bank. Although the impact on the economies and financial systems of the G7 countries has been limited, this is not the time for complacency, said German Central Bank Governor Joachim Nagel.

Financial leaders said they will closely monitor developments in the banking sector and are ready to take appropriate measures to maintain stability. The financial system remains resilient, and policymakers will work to address gaps in data, supervision, and regulation in the banking sector.

Supply chains

Trade disruptions also featured prominently on the list of concerns at the meeting, with an indirect reference to China. The financial leaders proposed a new partnership that would be open to other countries.

The communiqué states that the G7 countries aim to launch a partnership to strengthen supply chain resilience and inclusiveness by the end of this year at the latest.  

This indicates the growing concern of the G7 about China, given its role in supplying and manufacturing for the global economy. While the US insists on reducing its dependence on Beijing, some European countries have chosen a "more nuanced" approach.

EU Commissioner for Economic Affairs Paolo Gentiloni warned that separation from China poses a risk to global trade.

"What we are talking about is not closing our trade with China but making our supply chains more secure in some strategic sectors like rare minerals," he added.

• On April 23, the G7 agriculture ministers expressed concern about the devastating impact on global food security of the war unleashed by Russia against Ukraine.

• On April 26, the Japanese government was reported to be considering signing a joint outcome document on nuclear disarmament and non-proliferation at the May summit of the G7 countries.

• On May 12, G7 countries were reported to be discussing options for transferring frozen Russian assets to Ukraine.