Leaders of the G7 major democracies started their annual summit in Italy on Thursday. The key issue was Ukraine. Diplomats said a deal had been agreed in principle on plans to issue $50 billion worth of loans for Ukraine.
The money will be paid using interest from Russian sovereign assets. These assets were frozen after Moscow launched its invasion in 2022.
Western nations were also unanimous in their concern over China’s industrial overcapacity. They say this is distorting global markets, and their determination to help African states develop their economies.
“There is a lot of work to be done, but I am sure that in these two days we will be able to have discussions that will lead to concrete and measurable results.”
Ukraine to sign security pact with US
Italian Prime Minister Giorgia Meloni told her G7 guests as their talks started in a luxury hotel resort in the southern region of Puglia.
For a second year running, Ukrainian President Volodymyr Zelenskiy will attend the summit, taking part in talks on Thursday afternoon. After this, he will sign a new, long-term security accord with US President Joe Biden.
The G7 leaders will also announce that they have agreed to the outline of a multi-year loan using profits from impounded Russian funds. Legal experts will then finalise this with the aim of raising cash by the end of the year.
A senior EU official confirmed there was an outline agreement.
Underscoring US determination to punish Moscow for its invasion of Ukraine, Washington has broadened sanctions on Russia. This includes targeting China-based companies selling semiconductors to Moscow.
US also focuses on China’s industrial over-capacity
The US also wanted to focus on China’s industrial over-capacity. Sullivan said that China was a significant creditor to many heavily indebted countries.
“The G7 communique is not singling out or focusing on a single country.” However, he added that China needed to play a constructive role in dealing with the debt burden.
Eager not to appear like an elitist fortress, the G7 has thrown open its doors to a large number of outsiders this year, including the pope, who is expected to give a keynote speech on Friday on the risks and potential of Artificial Intelligence.
Among those who have also been invited to Puglia are the leaders of some of the biggest regional powers across the globe such as India, Brazil, Argentina, Turkey, Algeria and Kenya.
With inputs from Reuters
