G7 financial leaders will focus on Thursday and Friday on how to help Ukraine pay its bills, including post-war restructuring, global inflation, climate change, the supply chain and the impending food crisis.
The G7 finance ministers and central bank governors of the United States, Japan, Canada, Britain, Germany, France and Italy will discuss the issue because Ukraine, which was invaded by Russia on February 24, is fighting to repel the attack.
Ukraine’s war is a game-changer for Western powers as it forces them to reconsider their decades-old relationship with Russia, not only in terms of security, but also in terms of energy, food and global supply alliances, from microchips to rare earths.
“Ukraine is pushing these meetings. But other issues should be discussed as well,” said a G7 official, speaking on condition of anonymity, adding that debt, international taxes, climate change and world health were all debates.
Ukraine has estimated its financial needs at $ 5 billion per month to pay the salaries of government employees and to keep the administration working despite the daily devastation by Russia.
Russia has called its actions in Ukraine a “special operation” that says it is not designed to occupy the territory but to destroy the military capabilities of its southern neighbor and occupy what they consider dangerous nationalists.
The short-term financing package agreed by the G7 will cover Ukraine’s three-month demand.
The European Commission on Wednesday proposed a 9 billion euro ($ 9.44 billion) loan to Ukraine, financed by EU governments guaranteed by EU governments to meet Kiev’s demand by the end of June.
The commission proposed the creation of a fund of indefinite grants and loans for Ukraine, possibly jointly borrowed by the EU, to pay for the reconstruction of the country after the end of the war.
Some economists estimate that the financial need for such a project would range from 500 billion euros to 2 trillion euros ($ 524 billion to $ 2.09 trillion), with estimates varying frequently depending on the length of the conflict and the likelihood of destruction.
With that amount effective, the EU is considering not only a new joint loan project based on epidemic recovery funds, but also the seizure of frozen Russian resources now in the European Union as a source of funding.
Some countries, such as Germany, say that while the idea is politically attractive, it will have a shaky legal basis
U.S. officials insisted it was too early to map out funding for a massive reconstruction plan for Ukraine. Washington wants to focus on meeting Kiev’s immediate budget needs in the next three months.
“Ultimately, the requirements for this reconstruction will largely be somewhat in the future,” said a U.S. Treasury official. “That is why we are focusing more on Ukraine’s budgetary demands over the next three months than on restructuring, martial plans and the confiscation of assets.”
(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)