Yellen says G7 to give Ukraine funds it needs ‘to get through this’

KOENIGSWINTER, GERMANY • U.S. Treasury Secretary Janet Yellen said the Group of Seven finance leaders on Thursday agreed to provide Ukraine the financial resources it needs in its struggle against Russia’s invasion.

Yellen, speaking to reporters after the first day of a G7 finance ministers and central bank governors’ meeting here, declined to confirm an Us$18.4-billion figure pledged in the group’s draft communiqué seen by Reuters.

The meeting wraps up on Friday.

Yellen said that funding pledges to Ukraine during the meeting exceeded the US$15 billion that Kyiv has estimated it needs over the next three months to make up for lost revenues as the war devastates its economy.

A Us$40-billion aid package expected to be approved by the U.S. Senate this week would include US$7.5 billion in new economic aid, while the European Commission pledged 9 billion euros for Ukraine, Yellen said.

Other countries, including Canada and Germany, pledged additional amounts.

“The message was, ‘We stand behind Ukraine. We’re going to pull together with the resources that they need to get through this,’” Yellen said.

The government in Kyiv has estimated the impact of the war could reach US$560 billion, including indirect losses. The International Monetary Fund, which approved a US$1.4 billion emergency loan for the country in April, expects Ukraine’s economy to contract 35 per cent in 2022 because of the conflict.

A joint package by the G7 would transform the group’s messages of solidarity for Ukraine into hard financial fact. Until now, finance ministers have held discussions twice since the war broke out, including a brief gathering in Washington on April 20 when they “expressed our unwavering support” for the country’s people and government.

Earlier in the week, Yellen referenced the Marshall Plan as a model of what Ukraine might one day need. Named after former Secretary of State George C Marshall, that was a huge U.S. support package to aid war-torn Europe.

Discussions about mechanisms to reduce Russia’s revenues from oil exports to Europe were limited on Thursday, Yellen said, adding that there is a lot of interest in the concept.

U.S. officials have floated the idea of imposing tariffs on Russian oil to limit the amount of revenue that Moscow can collect while keeping Russian crude supplies on the market as EU officials pursue a phased embargo by year end.

Yellen said that a buyers’ cartel that would not buy oil above certain prices could be successful if it is large enough.

“Nothing is really crystallized as an obvious strategy,” she added.

THE MESSAGE WAS, ‘WE STAND BEHIND UKRAINE.’