Renew: 13/05/2023 09:17
Issued by: 13/05/2023, 09:17

Niigata (Japan) – At the end of a three-day meeting, finance ministers and central bank governors from the world’s top G7 economic group provided additional assistance to Ukraine, created new initiatives for supply chains and vowed to address deficiencies in the regulation of the banking sector. They put it together today statement after meeting in the Japanese city of Niigata.

“We call for an immediate end to Russia’s illegal war against Ukraine, which will remove one of the greatest uncertainties about the global economic outlook,” they said in a statement. Aid to Ukraine until early 2024 was increased to 44 billion dollars (957 billion CZK). This allowed the International Monetary Fund (IMF) to approve $15.6 billion in support over four years.

In a situation of increasing global economic uncertainty, according to representatives of the G7, the “flexibility” of economic policy needs to be maintained. The central bank will “ensure that inflation expectations are properly contained and will clearly communicate their stance to help limit negative cross-border spillovers,” the statement said.

This further offers some support to the United States’ efforts to reduce supply chain dependence on China while reaching countries in the Global South. The meeting was also attended by representatives from developing countries such as India, Brazil and India. It is not uncommon for non-member countries to participate in G7 leaders’ summits, but this is the first time since 2009 the heads of their financial institutions have been invited.

After the collapse of Silicon Valley Bank and First Republic Bank and the takeover of Credit Suisse, financial stability became a key topic at the meeting. The world’s top economic policy makers said they would be closely monitoring developments in the banking sector and that they were “ready to take appropriate action” to defend them. G7 finance ministers and central bank governors also said they would address weaknesses in non-bank institutions and liquidity problems in open funds.

During the meeting, G7 representatives further discussed global supply chain disruptions, particularly with regard to China. The finance minister has proposed a new partnership that will be open to other countries. They aim to launch the Partnership for Resilient and Inclusive Supply Chain Strengthening (RISE) by the end of this year, according to the release.

While the US is pushing to reduce its dependence on China, some European countries have taken a more restrained approach. European Economic Commissioner Paolo Gentilon warned that separation from China would be a risk to global trade.

“We don’t want to stop doing business with China, but make the supply chain safer in some strategic sectors such as precious minerals,” Gentiloni said in an interview on the sidelines of the meeting.

The meeting was overshadowed by the difficulties of the US, which is trying to prevent bankruptcy of the federal government. Treasury Secretary Janet Yellen said in an interview with Bloomberg Television on Friday that if Congress did not raise the debt limit, the federal government would be unable to cover some of the nation’s obligations. According to him, a definite turning point could occur on June 1.

Japan Finance economy diplomacy world G7