G7 to hike sanctions on Russia, nears oil price cap deal
G-7 leaders confer with Zelenskyy, prep new aid for Ukraine
SCHLOSS ELMAU, June 27: The Group of Seven rich democracies will commit on Tuesday to a new package of coordinated actions meant to raise pressure on Russia over its war in Ukraine, and will finalise plans for a price cap on Russian oil, a senior U.S. official said on Monday.
The announcement came as the White House said Russia had defaulted on its foreign sovereign bonds for the first time in decades - an assertion Moscow rejected - and as Ukrainian President Volodymyr Zelenskiy spoke virtually with G7 leaders meeting at an alpine resort in southern Germany.
Zelenskiy asked leaders of the Group of Seven leading industrial democracies for a broad range of military, economic and diplomatic support, according to a European official.
G7 nations, which generate nearly half the world's economic output, want to crank up pressure on Russia without stoking already soaring inflation that is causing strains at home and savaging the global south.
The price cap could hit Russian President Vladimir Putin's war chest while actually lowering energy prices.
"The dual objectives of G7 leaders have been to take direct aim at Putin's revenues, particularly through energy, but also to minimize the spillovers and the impact on the G7 economies and the rest of the world," the U.S. official said on the sidelines of the annual G7 summit.
G7 leaders would also make an "unprecedented, long-term security commitment to providing Ukraine with financial, humanitarian, military and diplomatic support as long as it takes", including the timely provision of advanced weapons, the White House said in a fact sheet.
Western sanctions have hit Russia's economy hard and the new measures are aimed at further depriving the Kremlin of oil revenues. G7 countries would work with others - including India - to limit the revenues that Putin can continue to generate, the U.S. official said.
India's Prime Minister Narendra Modi is one of the five leaders of guest nations joining the G7 for talks on climate change, energy, health, food security and gender equality on the second day of the summit.
"Since it is a mechanism that could benefit third countries more than Europe," one EU official said. "These countries are asking questions about the feasibility, but in principle to pay less for energy is a very popular theme."
A U.S. official said news that Russia defaulted on its foreign sovereign bonds for the first time since the Bolshevik revolution in 1917 showed how effective Western sanctions have been.
Meanwhile, Leading economic powers conferred by video link with Ukrainian President Volodymyr Zelenskyy on Monday as they underscored their commitment to Ukraine for "as long as it takes" with plans to pursue a price cap on Russian oil, raise tariffs on Russian goods and impose other new sanctions.
In addition, the U.S. was preparing to announce the purchase of an advanced surface-to-air missile system for Kyiv to help Ukraine fight back against Vladimir Putin's aggression.
The new aid and efforts by the Group of Seven leaders to punish Moscow come as Zelenskyy has openly worried that the West has become fatigued by the cost of a war that is contributing to soaring energy costs and price hikes on essential goods around the globe.
U.S. national security adviser Jake Sullivan said Zelenskyy's top request was for further air defense systems. Sullivan said most of the conversation was "about the way forward and how President Zelenskyy sees the course of the war." Zelenskyy also briefed the G-7 leaders on how his administration has the assistance he's received to date "to maximize Ukraine's capacity both to resist Russian advances, and to pursue counter attacks where possible," Sullivan said.
Sullivan added that the Ukrainian leader was "very much focused on trying to ensure that Ukraine is in as advantageous a position on the battlefield as possible" in coming months because "he believes that a grinding conflict is not in the interest of the Ukrainian people." -REUTERS, AP