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G7 starts amid Ukraine war, stagflation risk

2022 06 25T211817Z 541671785 RC29ZU9WO795 RTRMADP 3 G7 SUMMIT ARRIVALS

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German Chancellor Olaf Scholz on Sunday welcomed leaders of the Group of Seven Rich Democracies to a three-day summit in the Bavarian Alps that has been overshadowed by the war in Ukraine and its far-reaching consequences, from energy shortages to a food crisis.

The summit takes place against a darker backdrop than last year, when British, Canadian, French, German, Italian, Japanese and American leaders met for the first time since before the COVID-19 pandemic and pledged to better rebuild.

Rising global energy and food prices are hitting economic growth in the wake of the Russian invasion of Ukraine. The United Nations warned Friday of an “unprecedented global hunger crisis”. Climate change, an increasingly assertive China and the rise of authoritarianism are also on the agenda.

The G7 leaders are expected to show a united front to support Ukraine for as long as necessary and to increase pressure on the Kremlin – though they want to avoid sanctions that could fuel inflation and the crisis of the cost of livelihood that their own people.

“The main message from the G7 will be unity and coordination of action… That is the main message, that even in difficult times… we stick to our alliance,” said an EU official. The G7 partners will agree to ban imports of gold from Russia, a source familiar with the matter told Reuters.

A German government source later said leaders were holding “really constructive” talks about a possible price cap for Russian oil imports. G7 leaders are also expected to discuss options to tackle rising energy prices and replace Russia’s oil and gas imports.

The summit will take place in the castle resort of Schloss Elmau at the foot of Germany’s highest mountain, the Zugspitze – the same location as when the country last hosted the G7 annual meeting in 2015. Even then, Russian aggression against Ukraine’s agenda. a year after Moscow’s invasion of Crimea.

The summit is also an opportunity for Scholz to take advantage of his hosting by showing more assertive leadership on the crisis in Ukraine. The chancellor vowed a revolution in German foreign and defense policy after the Russian invasion in February, and promised to bolster the army with a €100 billion fund and send weapons to Ukraine.

But critics have since accused him of dragging on and sending mixed messages by warning that Russia could view NATO as a war party and highlighting the risk of nuclear war. The G7 was founded in 1975 as a forum for the wealthiest countries to discuss crises such as the OPEC oil embargo.

It became the G8 after Russia was admitted six years after the fall of the Soviet Union. But Moscow was suspended in 2014 after it annexed Crimea from Ukraine.

Global Partners

This year Scholz invited as partner countries Senegal, currently President of the African Union, Argentina, currently heading the Community of Latin American and Caribbean States, as well as Indonesia and India, the current and next hosts of the G20 group of major industrialized countries, as well as South Africa.

“The summit should convey the message not only that NATO and the G7 are more united than ever, but also that the democracies of the world stand together against Putin’s imperialism, just as they do in the fight against hunger and poverty. Scholz told the German newspaper. parliament this week.

Many countries in the south of the world are concerned about the collateral damage of Western sanctions. An EU official said the G7 countries would impress on partner countries that the spikes in food prices that hit them were the result of Russia’s actions and that there were no sanctions on food.

It was also a mistake to view the war in Ukraine as a local affair. “It’s more than this. It questions the order, the order after World War II,” the official said.

(REUTERS)

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