G7 summit kicks off under shadow of Ukraine war, stagflation risk

G7 summit kicks off under shadow of Ukraine war, stagflation risk
# 26 June 2022 03:30 (UTC +04:00)

German Chancellor Olaf Scholz welcomes leaders of the Group of Seven rich democracies on Sunday to a three-day summit in the Bavarian Alps overshadowed by the war in Ukraine and its far-reaching consequences, from energy shortages to a food crisis, APA reports citing Reuters.

The summit takes place against a darker backdrop than last year when the British, Canadian, French, German, Italian, Japanese and U.S. leaders met for the first time since before the COVID-19 pandemic and vowed to build back better.

Soaring global energy and food prices are hitting economic growth in the wake of the Russia-Ukraine war.

The United Nations warned on Friday of an "unprecedented global hunger crisis".

Climate change, an increasingly assertive China and the rise of authoritarianism are also set to be on the agenda.

The G7 leaders are expected to seek to show a united front on supporting Ukraine for as long as necessary and cranking up pressure on the Kremlin - although they will want to avoid sanctions that could stoke inflation and exacerbate the cost-of-living crisis affecting their own people.

"The main message from the G7 will be unity and coordination of action... That's the main message, that even through difficult times... we stick to our alliance," an EU official said.

The G7 partners are set to agree to ban imports of gold from Russia, a source familiar with the matter told Reuters. A German government source later said that leaders were having "really constructive" conversations on a possible price cap on Russian oil imports.

The G7 leaders are also expected to discuss options for tackling rising energy prices and replacing Russian oil and gas imports.

The summit takes place at the castle resort of Schloss Elmau at the foot of Germany's highest mountain, the Zugspitze - the same venue as when the country last hosted the G7 annual meet-up in 2015.