G7 countries to provide $19.8bn in economic aid to Ukraine

The Group of Seven (G7) leading economies agreed Friday to provide $19.8bn in economic aid to Ukraine to ensure its finances do not hinder its ability to defend itself from Russia’s invasion.

German finance minister Christian Lindner told reporters that $9.5bn of the total amount was mobilized at meetings of the G7 finance ministers in Koenigswinter, Germany, this week.

“We agreed that Ukraine’s financial situation must have no influence on Ukraine’s ability to defend itself successfully,” he said at a press conference to mark the end of the G7 finance ministers’ meeting. “We need to do our utmost to end this war.”

Russia’s invasion touched on almost every topic of meetings this week, from the need to reduce reliance on Russian energy to reforming relationships between countries to maintain economic stability.

“Russia’s war of aggression is causing global economic disruptions, impacting the security of global energy supply, food production and exports of food and agricultural commodities, as well as the functioning of global supply chains in general,” a G7 statement said.

US treasury secretary Janet Yellen and other leaders spoke this week about the need for allies to put together enough additional aid to help Ukraine “get through” the Russian invasion.

“All of us pledged to do what’s necessary to fill the gap,” Yellen said Thursday as the ministers finished their first of two days of talks. “We’re going to put together the resources that they need.”

The International Monetary Fund’s latest world economic outlook says Ukraine’s economy is projected to shrink by 35 percent this year and next.

The finance ministers of the G7 — which includes Canada, France, Germany, Italy, Japan, the UK and the US — also grappled with deepening inflation, food security concerns and other economic issues during their talks.

A communique marking the end of the G7 finance ministers’ meeting addressed commitments to addressing debt distress in low-income countries, trying to ease the fallout from the coronavirus pandemic and staving off inflation rates “that have reached levels not seen for decades”.

As the finance ministers were meeting in Germany, the US overwhelmingly approved its own $40bn infusion of military and economic aid for Ukraine and its allies. The legislation was backed by every voting Democrat and most Republicans.

Other issues of concern for G7 finance leaders touched on the need for countries to increase scrutiny and regulation of cryptocurrency and other digital assets, as well as streamlining pandemic responses.