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HomeEconomyG7 hopes to show unity on Ukraine despite bleak economic outlook MPNRC
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G7 hopes to show unity on Ukraine despite bleak economic outlook MPNRC

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The Group of Seven Prosperous Democracies will seek to demonstrate their long-standing support for Ukraine in its fight against the Russian aggression at a summit starting Sunday, even as the war’s growing impact on the world economy has dented their resolve. tested.

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The leaders of the United States, Germany, France, Britain, Italy, Canada and Japan will discuss how to crack down on the Kremlin at the Schloss Elmau, a luxury hotel in the Bavarian mountain valley, in a three-day summit.

But as the war moves into its fifth month, they will be wary of any sanctions that could further darken the global economic outlook. The conflict has already created food and energy shortages that are fueling inflation and global hunger.

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Price hikes are hitting the global south particularly hard, where countries were already grappling with the COVID-19 pandemic and the climate crisis.

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Ahead of back-to-back EU, G7 and NATO summits, German Chancellor Olaf Scholz told the German parliament on Wednesday that the message was bigger than sending the message that the West was “like never before”.

The summits should also show that “the world’s democracies stand together in the fight against Putin’s imperialism as well as hunger, poverty, the health crisis and climate change,” he said.

If the West does not show solidarity with countries in the global south – many of which have criticized Western sanctions – Russia and China will benefit, he warned.

A German government official said finding a new approach to China that reflects human rights concerns, supply chain problems and the often negative impact of its global investments would play a “huge role” at the summit.

G7 leaders will launch a new infrastructure initiative aimed at offering high-quality, transparent investments to low- and middle-income countries, senior US officials said, an apparent response to China’s Belt and Road project, which has opaque contracts. and has been criticized for heavy loan terms.

Scholz has invited the leaders of Senegal – which holds the rotating chair of the African Union – and Argentina – which chairs the Community of Latin American and Caribbean States – as well as India, Indonesia and South Africa as partner countries.

Marshall plan for Ukraine?

As the German official said Ukraine is fighting Russian forces to its east that have killed thousands more flattened cities, leaders will discuss the need for long-term financial aid to help rebuild the country.

“We are talking about a much larger amount than the current 5 billion euros (external aid) a month,” the official said. Scholz said the country needed a “martial plan”, such as the American program that rebuilt Europe after World War II.

On Monday, Ukrainian President Volodymyr Zelensky will address him via video link.

Russia’s efforts to strike a war chest have been hampered by Europe’s reliance on Russian energy imports. The sharp cut in deliveries in the last one week has forced the sector to look for alternatives. A senior EU official said on Wednesday that a temporary shift to coal would not derail long-term climate goals. [L1N2Y90HK]

G7 leaders are ready to discuss setting up a climate club to better coordinate carbon pricing and other plans to reduce emissions, at least in hopes of avoiding trade wars, German officials said. he said.

They will also discuss the darkening global economic outlook, the official said – the challenge of controlling government spending without sending the economy into shock.

Around 20,000 police officers have been deployed to ensure security at the summit, with Scholz eager to avoid a re-run of the G20 summit held in 2018 as mayor of Hamburg, which was marred by violent protests .

The G7 was founded in 1975 as a forum for the richest countries to discuss crises such as the OPEC oil embargo.

China, the world’s second largest economy, has never been a member of the G-7. Russia, accepted as a G8 member six years after the collapse of the Soviet Union, was suspended after Ukraine’s annexation of the Crimean peninsula in 2014.

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