G7 leaders meet to discuss action plan for Russia and inflation

G7 leaders are meeting in the Bavarian Alps to discuss global inflation and continued pressure on Russia as the invasion of Ukraine continues with strikes in Kyiv. The US, UK, Canada, and Japan will ban Russian gold imports in an attempt to cut funding from the regime of Russian president Vladimir Putin. US president Joe Biden has insisted that G7 nations must stick together in the fight against Putin, while other member countries decide if they want to join the ban. The official announcement is expected Tuesday (June 28).

The UK is by far the biggest importer of Russian gold. UK prime minister Boris Johnson said the ban will “directly hit Russian oligarchs and strike at the heart of Putin’s war machine.” Russia’s gold exports bring in around $19 billion in revenue each year, its largest known export after oil and gas.

Securing energy and food resources

G7 leaders are expected to discuss how to combat rising energy prices, and how to replace Russian oil and gas. The US is pushing for a price cap on Russian oil, which would allow for the lifting of sanctions for countries that agree to buy Russian oil for no more than a set price. Setting a maximum price for Russian oil would limit how much Russia can charge and profit from its energy resources.

Food supply chains are also under stress as a result of compounding factors: war in Ukraine, fuel and fertilizer shortages, the covid pandemic, and ongoing climate change. Consequently, the UN warns of an “unprecedented global hunger crisis.” Leaders face a difficult balancing act where sanctions could make inflation worse and affect the cost of living in their home countries. The EU has expressed caution on both the gold ban and oil price cap until details are worked out.

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