On 18-20 May 2022, G7 finance ministers and central bank governors convened in Bonn and Königswinter, where they held in-depth talks on a variety of pressing global challenges. At their third meeting under Germany’s G7 presidency, the finance leaders agreed on specific measures to intensify multilateral economic cooperation.
After their meeting on 20 May, the G7 finance ministers and central bank governors released a joint communiqué that can be downloaded here:
“Together with international organisations, the G7 have put together a package that aims to provide Ukraine with the financial means to continue functioning effectively in the foreseeable future.”
Finance Minister Christian Lindner
The talks focused in particular on demonstrating solidarity with Ukraine and taking additional concrete steps to provide Ukraine with financial support. At the final press conference, Finance Minister Christian Lindner declared that “Ukraine’s financial situation must not have any influence on its ability to defend itself successfully.” He stated further that important progress towards this end had been achieved at the meeting.
Together with international financial institutions, the G7 will make direct, short-term financial assistance available to Ukraine in an amount totalling USD 19.8 billion. Nearly half of this amount (USD 9.5 billion) was mobilised at the Bonn/Königswinter meeting. Germany pledged a major contribution of €1 billion. In Lindner’s words, “We are providing Ukraine with rapid and comprehensive support”. He emphasised that the newly mobilised funding does not include the humanitarian and military aid that is already being provided. In the years from 2014 to 2021, assistance totalling over USD 60 billion has been provided to Ukraine. Germany has contributed the second-largest share of this assistance, behind only the United States.
Upon invitation by the German presidency, the meeting was also attended virtually by Prime Minister Denys Shmyhal and Finance Minister Sergii Marchenko of Ukraine.
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Topics on the agenda
- Macroeconomic stability
The meeting also addressed the long-term and acute short-term challenges currently facing the global economy. A particular challenge is rising inflation, especially climbing energy prices.
“The G7 countries are determined to take resolute measures to stop rising inflation and boost economic growth”, said Lindner after the meeting. He emphasised that inflation poses an enormous risk to economic progress in particular, and that fighting inflationary trends requires coordinated international action. He also stated that a way must now be found to phase out expansionary fiscal policies. - Debt management in developing countries
The 2022 Finance Track is paying particular attention to low-income countries with high levels of debt. The G7 countries advocate multilateral support for these countries, particularly through more rigorous implementation of the Common Framework for Debt Treatments adopted by the G20.
If low-income countries in particular experience a financial emergency, this can threaten food supplies and political stability in these societies, said Lindner. If they can no longer service their debt, they then also pose a risk to international financial stability, he added. For this reason, the G7 intends to cooperate with international organisations in taking action before a crisis happens. - Climate neutrality
The G7 talks also focused on the proposal to establish an open and cooperative “climate club” as a multilateral vehicle for taking ambitious climate action. The German G7 presidency wants to move forward with the climate club and placed this matter on the meeting’s agenda.
According to Lindner, the aim here is to give shape to a global climate action system that makes it easier to compare different climate policy measures, steers these measures in a common direction, and creates incentives to meet established climate targets by 2050 or earlier. - Global minimum tax
At their meeting, G7 finance leaders also addressed issues of international taxation. They focused in particular on the two-pillar plan to reallocate taxing rights and introduce a global minimum tax. The G7 countries reaffirmed their commitment to implementing the plan. Lindner also highlighted planned steps to strengthen international cooperation between tax administrations – another priority of Germany’s G7 presidency. - Overcoming the global coronavirus pandemic
To facilitate global economic recovery, it is essential to overcome the coronavirus pandemic. In the Finance Track, Germany’s G7 presidency is committed to accelerating the global vaccination campaign, providing continued funding for vaccines, and distributing vaccines effectively and fairly.
Germany is the second-largest donor to the international ACT-A initiative, which stands for “Access to COVID-19 Tools Accelerator”. By contributing USD 1.5 billion to the initiative in 2022, Germany is living up to its responsibilities and showing leadership as holder of the G7 presidency. Germany has contributed a total of approximately USD 4 billion to the initiative since 2020.
In addition, the German G7 presidency intends to build on the lessons learned during the pandemic by driving forward a coordinated approach to global pandemic preparedness and strengthening the global health architecture. At the meeting in Bonn/Königswinter, health issues were addressed at a joint, virtual “working lunch” with G7 health ministers, who were meeting in Berlin at the same time.