Earlier, the G7 was a closed-door gathering of Western leaders for casual discussions, but now host nations may invite outside guests to participate in certain sessions
Italy is all set to host the G7 meeting and this year, the main topics of discussion at the summit will be a major extension of organizations exposed to US sanctions for aiding the Russian economy and a $50 billion loan led by the EU to lessen the financial burden on Ukraine.
The leaders will be under increased pressure to deliver tangible outcomes from their three days of talks. It will cover an interconnected agenda that includes the war in Ukraine, migration, Africa, the Middle East, the climate crisis, and utilizing artificial intelligence (AI). They will be confronted with unprecedented challenges from disgruntled electorates.
Earlier, the Group of 7 was a closed-door gathering of Western leaders for casual discussions, but now host nations may invite outside guests to participate in certain sessions. Pope Francis, the populist president of Argentina, Javier Milei, the prime minister of India, and the president of Brazil, Luiz Inácio Lula da Silva, will all be welcomed to Italy. Volodymyr Zelenskiy, the president of Ukraine, and Joe Biden, the president of the United States, will jointly hold a press conference. The intention is to demonstrate that the West is unaffected by its issues and is still committed to opposing Russia’s “arsenal of autocracy.”
The US State Department has positioned the conference as the best chance to relieve Ukraine’s financial obligations before the US presidential elections in November and to demonstrate to Russia the might of the West. The G7 wants as much as possible for its decisions to be impervious to Trump.
At least nine people were killed in a Russian missile strike on an apartment building in Zelenskiy’s hometown of Kryvyi Rih, highlighting the gravity of the situation. In addition, twenty-nine additional people—five of them children—were injured in the Wednesday attack.
The main US plan which was introduced the night before the summit, is a broadening list of organizations including banks, that will be sanctioned should it be determined that they are aiding not just Russia’s military-industrial complex but also any other sanctioned Russian firm.
Many more non-US citizens and banks will be exposed to the consequences under this secondary regime of sanctions, which the US has already implemented in Iran and applied to organizations assisting the Russian military in December. This is especially true if these institutions engage in dollar-denominated transactions. The number of entities that no one should trade with is predicted to increase from roughly 1,000 to 4,000.
This change is meant to put a dent in the network of nations in the Balkans, the Middle East, and central Asia that serve as middlemen for the sale of western commodities to Russia. The US has justified this shift by arguing that it makes the Russian economy as a whole part of its war economy. For instance, in only a single year, Kyrgyzstan’s imports of automobiles made in Germany have increased by 5,000%.
“We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services,” stated US Treasury Secretary Janet Yellen on Wednesday.
Daleep Singh, the initial US architect of the first round of post-invasion sanctions in 2022, has been a major proponent of the strategy. Singh rejoined the State Department following a period in the private sector.
The lack of continuity between one country’s annual chairship and the next is a common criticism of the G7, yet one of the few policy areas where the group has established a nearly permanent bureaucracy through a little-known network of subgroups is economic help to Ukraine.
At the conference, there are two controversial decisions pertaining to Ukraine. First, it’s really technical. Political in nature is the second.
The first is if the US wants the yearly revenues from the state assets of the Russian central bank that were blocked by the G7 in 2022 and valued at around $281 billion to be used to pay off interest on a $50 billion loan to Ukraine. The second is the extent to which China should be penalized for its backing of the Russian economy.
The EU, where the majority of Russia’s assets are held, said the US plan was contingent on the bloc agreeing to renew the retention of the profits every six months, a decision that requires unanimity among the 27 member states, a guarantee it could not provide. France and Britain had backed the US scheme. Its legitimacy will be determined by the amount of information presented at the summit regarding a different EU plan intended to obtain the same loan.
There are still supporters of giving Ukraine all of the assets in exchange for Russian military damage, but the concept does not yet have the required political backing. This week, UK Foreign Secretary David Cameron acknowledged that total confiscation is not a feasible option.
“We are moving to a common understanding of the mechanism and we expect participation of multiple countries,” stated US National Security Advisor Jake Sullivan on Wednesday in reference to the loan proposal.
The second concern is China’s involvement in the sale of semiconductors, machine tools, and other dual-use goods to Russia in order to help Moscow rebuild its industrial base.
“China has committed not to supply arms and we don’t have evidence that this has happened,” said EU foreign policy leader Josep Borrell. However, he clarified that the term “dual-use” did not imply a distinct division between arms and non-arms, and that Chinese shipments to Russia had increased more in the last two years than they had in the preceding ten.
How far China is willing to jeopardize its commercial relations with the US in order to back Russia will determine a lot. According to Singh, Russia faces challenges since the “partnership without limits” that Putin has praised is a “partnership without symmetry,” making Russia the only party involved.