G7 financial leaders on Thursday and Friday will focus on how to help Ukraine pay its bills and rebuild after the war. Rising global inflation, climate change, supply chains, and the coming food crisis are also in focus, Reuters wrote.
Finance ministers and central bank governors from the U.S., Japan, Canada, Britain, Germany, France, and Italy (together, the Group of 7) will hold two days of talks.
Ukraine needs 5 bl dollars a month to pay salaries to state employees and keep administrations running. The short-term financing package to be agreed upon by the G7 will cover Ukraine's three-month needs.
The European Commission yesterday proposed that a 9 billion euros loan be provided to Ukrainians and financed by EU loans. It also proposes the creation of a fund of unspecified grants and loans for Ukraine to pay for post-war reconstruction. Some economists estimate that such a project would require between 500 billion and two trillion euros, an estimate that could change depending on the scale of destruction and the duration of the war.
Given the extent of the amounts, the EU is considering confiscating frozen russian assets and directing them to finance reconstruction. Some countries, such as Germany, say this "idea is interesting but would have a very shaky legal basis". The U.S. believes it is too early to talk about post-war reconstruction and that we should concentrate on Ukraine's current budgetary needs for the next three months.
EU chief diplomat Josep Borrel believes that the European Union should consider withdrawing frozen russian currency reserves and directing them to the reconstruction of Ukraine. Borrel believes it is a logical step to do with these assets the same way the U.S. did with the Afghan central bank after the Taliban took over.