G7 to increase financial aid to Ukraine in 2023 to $39 bln, calls for large-scale program with IMF by late March – statement

KYIV. Feb 23 (Interfax-Ukraine) – Based on the needs of the government of Ukraine, the G7 countries have increased their obligations for budgetary and economic support to the country in 2023 to $39 billion, according to a joint statement by the finance ministers and heads of central banks of the G7 countries on the anniversary of the Russian military aggression against Ukraine and its impact on the global economy on Thursday.

“We, together with the international community, remain strongly committed to addressing Ukraine’s urgent short-term financing needs… These significant commitments and their swift disbursement give Ukraine certainty and enable the authorities to safeguard the functioning of government, continue the delivery of basic services, carry out the most critical repairs of damaged infrastructure and stabilize the economy,” the document notes.

It also states that this financial support is in addition to vital military support and training for Ukrainian forces, humanitarian support and development cooperation.

It is specified that the meeting of the G7 finance ministers in Bangalore (India) was also attended by the heads of the International Monetary Fund, the World Bank Group, the Organisation for Economic Co-operation and Development and the Financial Stability Board, as well as, via video link, Minister of Finance of Ukraine Serhiy Marchenko.

Ministers also expressed strong support for the IMF’s close engagement with Ukraine and welcomed the progress made in completing the review of the Monitoring Program with Executive Board Involvement.

“We reiterate our strong support for the IMF’s close engagement with Ukraine and welcome the progress made to complete a review under the IMF Program Monitoring with Executive Board Involvement,” the document notes.

“We also recognize the important efforts made by the World Bank Group (WBG) to channel a significant amount of support for Ukraine, including through the Public Expenditures for Administrative Capacity Endurance (PEACE) facility and the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF). We welcome the work of the International Finance Corporation as well as the initiative of the Multilateral Investment Guarantee Agency to launch its new trust fund to support private investment in Ukraine,” it says.

“We will continue our joint efforts to support and contribute to Ukraine’s repair of its critical infrastructure, recovery and reconstruction, including through the Multi-agency Donor Coordination Platform. We will also closely coordinate with relevant IFIs, including the WBG, the European Bank for Reconstruction and Development and the European Investment Bank,” the minister said.

“We re-emphasize our shared commitment to our coordinated economic measures in response to Russia’s war of aggression. Our sanctions have significantly undermined Russia’s capacity to wage its illegal war. We will continue to closely monitor the effectiveness of sanctions and take further actions as needed. We will also continue to work closely together and with our partners to enforce our sanctions and prevent any attempts to evade or circumvent sanctions. In this context, we call on other countries to join our sanctions on Russia,” the document notes.

Its authors noted that Russia’s aggressive war and the global challenges associated with it disproportionately affect low- and middle-income countries, in connection with which the G7 countries are committed to step up their efforts and contribute to the G20 agenda to support them. This includes supporting the work of the G20 on debt vulnerabilities; facilitating the efforts of multilateral development banks (MDBs) to make the best use of their balance sheets, as well as reviewing their business models to better address cross-border issues.

It is also planned to advance joint efforts with international partners to support countries most in need through voluntary sending of special drawing rights (SDR) or equivalent contributions with a global ambition of $100 billion and further progress towards the IMF-WB Spring Meetings in April 2023.