(Bloomberg) — Finance chiefs from the world’s most powerful economies hardened their positions regarding language on Russia’s war in Ukraine, with the one-year mark looming over other critical global issues such as debt relief for poorer nations.
US Treasury Secretary Janet Yellen said Russia ending the war was “the most important thing” for the global economy as she accused officials from Moscow attending the Group of 20 meeting of being complicit in atrocities taking place in Ukraine.
Officials from UK, Germany, and South Korea echoed Yellen’s sentiment throughout the first of two days of meetings of finance ministers and central bank chiefs in Bengaluru, India.
Some participants on Friday, the one-year mark of Russia’s war in Ukraine, rallied for language regarding the war agreed at the November leaders’ meeting in Bali to be replicated in this weekend’s final statement.
“Either we stick to the Bali communiqué or France will oppose any communiqué of the finance ministers,” French Finance Minister Bruno Le Maire told reporters in an evening press conference in Bengaluru. “I cannot be clearer.”
The calls for a tough tone on Russia may complicate efforts to reach a jointly agreed statement this time around. India is pushing for the traditional concluding statement and is showing signs of flexibility on language but it’s not clear if Russian officials, who have kept a low profile at the meetings, will go along.
Progress in negotiations on debt restructuring and loan relief has also been clouded by division.
In an address to the gathering Friday morning, Indian Prime Minister Narendra Modi recognized “serious economic difficulties” and “rising geopolitical tensions” that cloud the talks, without calling out Russia’s war in Ukraine by name.
China Tensions
US-China tensions remain heated in the aftermath of the spy balloon episode. Those divisions are also spilling over into the topmost agenda items, including how to restructure debt for many low-income countries in distress.
“We’re calling on China to live up to its responsibilities,” German Finance Minister Christian Lindner said in a Friday press conference in Bengaluru, which was formerly known as Bangalore. “We want to stick to established procedures,” and that involves development banks shouldn’t be part of any restructuring.
China says it wants to see the World Bank and other multilateral lenders it sees as US proxies share in any creditor pain by also agreeing to a haircut on their loans. In a video speech Friday, Chinese Finance Minister Liu Kun said G-20 nations should mobilize more financing through multiple channels to boost the global economic recovery.
Officials from the US and China were holding a meeting Friday to discuss a range of issues including debt, a source familiar with the talks said.
The US announced its nomination of former Mastercard Inc. Chief Executive Officer Ajay Banga to succeed the departing David Malpass as World Bank president — a post traditionally held by an American with the US as the largest shareholder.
Germany’s Lindner called the US nomination “remarkable” and specifically acknowledged Banga’s private-sector background as an asset toward winning more private capital, as well as a personality that could help bridge the developed and developing worlds.
Friday afternoon meetings included two separate sessions on financial inclusion. Saturday, a slate of debt restructuring talks are expected, in addition to scheduled discussions that will tackle financing for small and medium-sized enterprises, global health, and international taxation ahead of a final evening press conference.
–With assistance from Ruchi Bhatia, Haslinda Amin, Anup Roy, Devidutta Tripathy, Vrishti Beniwal, Jana Randow and Yoshiaki Nohara.
(Updates with additional comment, detail starting in fifth paragraph.)
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