Daily Times

Support for war-torn Ukraine topped the agenda at G7 finance talks on Thursday in Japan, where ministers and central bankers also weighed concerns ranging from banking uncertainty to US debt default fears. The meeting of the Group of Seven developed nations comes with the global economy still unsteady after years of pandemic woes compounded by Russia’s invasion of Ukraine. So the three-day talks in the coastal city of Niigata in central Japan are a chance to set out a vision for financial stability before G7 leaders get together next weekend in Hiroshima. US Treasury Secretary Janet Yellen arrived under the cloud of Washington’s debt limit impasse, warning that a default risked “catastrophe” and even political brinkmanship on the issue could trigger “serious economic costs”. She also called for the enforcement of US-led economic measures imposed on Moscow. “This year, a central piece of our strategy is to take further actions to disrupt Russia’s attempts to evade our sanctions,” she said in a speech as the event kicked off. This includes “identifying and shutting down specific channels used by Russia to equip and fund its military”, and pressuring companies and jurisdictions facilitating evasion, Yellen added. When G7 finance ministers met in April in Washington, they hailed IMF approval of $15.6 billion in financing for Kyiv, recommitted to sanctions on Moscow and pledged “further actions as needed”. There has been no official indication that new measures will be agreed to during this week’s talks but the door is open, said John Kirton, director of the G7 Research Group at the University of Toronto. Fresh action could centre around “strengthening sanctions evasion… starting with China”, he told AFP ahead of the Niigata talks, which Ukrainian Finance Minister Sergii Marchenko will join virtually. EU officials are already discussing halting exports of sensitive technologies to eight Chinese companies over suspicions they are selling them to Russia. The G7 could also try to stop tankers from covertly selling Russian oil in violation of the group’s oil price cap, Kirton said. Stronger supply chains, crypto regulation and climate finance will be talking points for the ministers, central bank chiefs, and the heads of the IMF, OECD and World Bank. Japanese Finance Minister Shunichi Suzuki has stressed the need for vigilance in the banking sector, which is likely to loom large in discussions. Three regional US banks have collapsed since early March, sparking panic among customers and turmoil for the shares of mid-sized institutions.