Leaders of the G7, a group that brings together the largest economies in the world, announced this Sunday (26) that they will ban the import of Russian gold. The new sanction was announced during the opening of the G7 summit, an event that takes place in Germany and will largely be dedicated to the war in Ukraine.
The measure had been proposed by the United States, which has coordinated with other countries ways to impose rapid and significant economic costs on Russia, with the aim of denying President Vladimir Putin the necessary revenue to finance his war.
“Together, the G7 will announce that we will ban Russian gold, a major export source, depriving Russia of billions of dollars,” tweeted US President Joe Biden.
The leaders of the great economic powers — the USA, Canada, Japan, Germany, France, Italy and the United Kingdom — meet for three days in the Bavarian castle of Elmau. Ukrainian President Volodymyr Zelensky will attend the summit virtually on Monday (27).
Awaiting a collective announcement at the end of the meeting on Tuesday (28), the UK, Canada, Japan and the US took the lead and announced an embargo on newly mined gold in Russia.
“These measures will directly hit the Russian oligarchs and the heart of Putin’s war machine,” British Prime Minister Boris Johnson said.
Russia is a major gold producer, whose exports accounted for about $15.5 billion in 2021, according to Downing Street. Banning the product on markets in London, for example — which is a major financial hub for commodity trading — could have a big impact on Putin’s ability to raise funds.
In addition, Russian oligarchs rushed to turn their assets into gold to avoid the brunt of Moscow’s financial constraints.
Risk of “tiredness”
Western countries have punished Russia with exceptionally tough economic sanctions, without apparently bothering President Vladimir Putin, who is constantly upping the ante in a war with no end in sight.
The Ukrainian government considers the sanctions not enough and asks to punish Russia even more, which again bombed the Ukrainian capital on Sunday (26), an act that Biden described as “barbaric”.
The US leader called for the unity of the G7 and NATO in the face of Moscow’s offensive. Vladimir Putin hoped “that, one way or another, NATO and the G7 would separate,” Biden said. “But we didn’t and we won’t,” he added.
British Prime Minister Boris Johnson, however, warned of the risk of “fatigue” in Western countries. Faced with the advance of Russian troops in the Donbass region of eastern Ukraine, Johnson agreed with French President Emmanuel Macron that “it was a critical moment for the evolution of the conflict and that it was possible to change the course of the war”, according to a British government spokesman.
No negotiating a solution now
However, Johnson warned the French leader that a negotiated solution now in Ukraine could prolong “global instability”.
The conflict and its consequences will be widely discussed at the summit that runs until Tuesday, but other challenges will also be addressed, such as the threat of recession and the environmental crises caused by climate change.
In addition to the current situation of tensions with Russia, Western countries look with concern to China, which emerges as a systemic rival. The G7 wants to counter the Asian giant and its new silk routes by investing massively in the infrastructure of countries in Africa, Asia and Latin America. Leaders will take stock of this project this Sunday.
Indeed, to nurture alliances outside its area, the G7 invited the leaders of Argentina, India, Indonesia, Senegal and South Africa to its summit. Argentina and Indonesia supported the votes against Russia at the UN, but the other guests abstained.
Everyone is worried about the threat of a famine caused by Ukraine’s blockade of grain exports. Faced with this risk, India has already restricted its own exports.
internal difficulties
Climate activists, meanwhile, expect the G7 to make concrete advances, such as having an agenda to completely eliminate the use of fossil fuels.
The summit sessions will be complemented by bilateral meetings.
The first will be between Biden and German Chancellor Olaf Scholz, two leaders who face difficulties in their own countries. Scholz and his partners have become, since the invasion of Ukraine, firefighters for all the geopolitical, economic and financial fires caused by the war.
Biden arrives as president of a country affected by high inflation and divided by the Supreme Court decision that overturned the right to abortion at the federal level.
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