On Thursday, the Group of Seven decided to provide Ukraine with $ 18.4 billion (€ 17.6 billion) to pay its bills, funds that Ukrainian Prime Minister Denys Shmyhal said would accelerate Kiev’s victory over Russia and which were as important as “the weapons you supply”.
“The message was, ‘We are behind Ukraine. We are going to pool the resources they need to make it,’” US Treasury Secretary Janet Yellen told reporters at the G7 financial leaders meeting in Königswinter. , near Bonn in Germany.
On Thursday Shmyhal tweeted: “Partner support will accelerate our victory … Despite Russia’s efforts to destroy our economy, together we will win!”
Further arms promises also came on Thursday, as US Secretary of State Antony Blinken said Thursday that he authorized $ 100 million (€ 94.4 million) in additional US weapons, equipment and supplies for Ukraine.
G7 finance ministers were trying to strike a new deal on Thursday to keep Ukraine’s budget afloat without losing sight of the global economic impact of the Moscow war.
Ministers and central bankers of the seven industrial powers – the United States, Japan, Canada, France, Italy, the United Kingdom and Germany – quickly began calculating the sums each country could shell out.
The United States has confirmed that it will contribute $ 7.5 billion (€ 7 billion) from the massive $ 40 billion (€ 37.8 billion) aid package that the United States Congress approved on Thursday.
Germany announced on Thursday a contribution of 1 billion euros.
Urgent needs of Ukraine
The urgency is to provide Ukraine with cash for the current quarter as the conflict causes a slump in cash inflows.
“We are collecting various promises of direct aid to continue financing Ukraine’s state functions with our own means,” explained German Finance Minister Christian Lindner, whose country chairs the G7 this year.
Lindner said he hoped for “further progress” and additional commitments by the end of the meeting on Friday. He is aiming for a total figure of over 10 billion euros.
To keep the country running, Kiev estimates it needs $ 5 billion (€ 4.7 billion) a month.
On Wednesday, the European Commission proposed to Ukraine “new macro-financial assistance” for this year “up to € 9 billion”.
The share of loans and direct aid in this new support package is on the agenda of the G7 discussions.
On Thursday, the UK government said it will provide £ 50m (€ 59m) to secure the supply of electricity to Ukrainians through the European Development Bank.
The Russian offensive has pushed up the prices of energy, raw materials and agricultural products in world markets.
In the longer term, discussions on the reconstruction of Ukraine “have only just begun,” Yellen stressed in Königswinter.
Some funding modalities were mentioned, such as using frozen Russian assets under Western sanctions.
While Germany considers this hypothesis “politically conceivable”, it points out, as does France, that there are many legal obstacles. “We have to look carefully at the constraints that are imposed on us,” said the French finance ministry.
“We must respect the rule of law, even if we are dealing with Russian oligarchs,” Lindner noted recently.
The war launched by Russia is expected to cause a massive contraction of the Ukrainian economy, estimated for this year at 30% by the European Bank for Reconstruction and Development (EBRD), and as much as 45% by the World Bank.