KÖNIGSWINTER, Germany — The Group of 7 Economic Powers agreed Friday to provide nearly $20 billion to support Ukraine’s economy over the coming months to keep the country’s government afloat as it fights to fend off a Russian invasion .
In a joint statement after two days of meeting, the Group of 7 finance ministers reaffirmed their commitment to help Ukraine with a mix of grants and loans. Ukraine needs about $5 billion a month to maintain basic government services, according to the International Monetary Fund.
The $19.8 billion financing was agreed after the United States, which contributes more than $9 billion in short-term financing, pressured its allies to do more to secure Ukraine’s future. The statement does not state how much the other Group of 7 countries will contribute.
However, the European Commission previously agreed to provide up to €9 billion in financial support. The European Bank for Reconstruction and Development and the International Finance Corporation plan to provide an additional $3.4 billion to Ukrainian state-owned enterprises and the private sector.
“We will continue to support Ukraine through this war and beyond and are ready to do more if necessary,” the statement said.
Economic policymakers also acknowledged that more repercussions from the war lie ahead, pledging Friday to keep markets open as they combat rising food and energy prices around the world. They also said their central banks would closely monitor inflationary measures and the impact of rising prices on their economies.
“We are deeply concerned about crises and macroeconomic developments,” German Finance Minister Christian Lindner said at a closing press conference on Friday, according to an English translation.
The two-day summit on the outskirts of Bonn came at a pivotal time for the global economy, with growing concerns that a combination of war, supply chain problems and the ongoing effects of the pandemic could lead to a contraction in global production. Finance ministers discussed ways to keep pressure on Russia while minimizing damage to their economies, while debating the merits of a European embargo on Russian oil and whether seized Russian assets could be used to help rebuild Ukraine to pay.
“The values of the international community have been completely rejected by Russia,” said Mr Lindner.
Officials from the world’s leading advanced economies discussed other areas for possible cooperation, such as fighting climate change and making progress on a global tax deal reached last year that faces implementation challenges.
But the complicated mix of foreign policy challenges and economic headwinds dominated the meetings.
Treasury Secretary Janet L. Yellen warned this week that Europe could be vulnerable to a recession due to its exposure to Russian energy. She doesn’t expect a recession in the United States, but said Thursday a “soft landing” was not guaranteed as the Federal Reserve raises interest rates to tame inflation.
“I think it’s conceivable that there could be a soft landing, requiring both skill and luck,” Ms Yellen told reporters on the sidelines of the Group of 7 summit. “It’s a very difficult economic situation.”