In the shadow of growing risks to the global economy, finance chiefs from the world’s wealthiest nations have put forward a united front that includes increased support for Ukraine, plans to diversify supply chains and pledges to fill holes in financial regulation. .
After three days of consultations in Niigata, Japan, the G7 readily agreed to a statement that could be seen less than three months later at the G20 Finance Ministers and Central Bank Governors meeting in Bangalore, India. It was in stark contrast to the disagreement. , ended without the usual communiqué.
The difference is that neither China nor Russia exists. Condemnation of “Russia’s war of aggression” against Ukraine dominated the 14-page statement, but there was no direct reference to China. But a thinly veiled plan was to counter its dominance of global supply chains and its growing influence over the global South.
US Treasury Secretary Janet Yellen has been stuck in a debt ceiling deadlock. In an interview with Bloomberg TV, he said the federal government would have to withhold some payments if Congress did not raise the debt ceiling.
Here are the results of the three days of talks:
Aid to Ukraine by early 2024 has been increased to a maximum of $44 billion, in a move that allows the International Monetary Fund to approve $15.6 billion in aid over four years. “We call for an immediate end to Russia’s illegal war against Ukraine, which would resolve one of the greatest uncertainties surrounding the global economic outlook,” the Treasury secretaries said in a statement.
Amid heightened uncertainty in the global economy, leaders stressed the need to remain “agile and flexible” on economic policy. The communiqué added that the central bank “will clearly communicate its policy stance to ensure that inflation expectations are well maintained and to limit negative spillovers across countries.”
The need to ensure global financial stability became a prominent theme after the failures of Silicon Valley Bank and First Republic Bank and the acquisition of Credit Suisse. In its communiqué, the G7 maintained its position that the global financial system remained “robust,” but officials also cautioned against complacency with the status quo.
Trade turmoil was also among the top concerns at the meeting, implicitly showing concern for China. As previously reported by Bloomberg News, finance chiefs have proposed new partnerships aimed at clean energy, open to other countries. The communiqué revealed that the two companies aim to launch a partnership for Resilient and Inclusive Supply Chain Strengthening (RISE) by the end of this year at the latest.
To build consensus beyond the G7, Treasury secretaries are careful to include other countries in the conversation, with session pledging more support to low- and middle-income countries and helping to secure resources from IMF facilities devoted to that. The communiqué cited Zambia, Ethiopia and Ghana as countries that have recently made or are expected to make some progress under the so-called G20 Common Framework.
Treasurers also affirmed their commitment to climate change mitigation and adaptation, strengthening the governance and finances of the global healthcare structure, with no major new progress on these fronts, and the removal of cryptocurrency regulations. We continued to work towards
Attention now turns to the G7 summit, which will be held in Hiroshima from May 19-21.
(With help from Alessandra Migliaccio, Christopher Condon, Kamil Cowalche, Joe Mays, Emi Urabe, Toru Fujioka, and Erika Yokoyama.)