Biden says G7 must hold together as gold sanctions target Putin’s ‘war machine’

Schloss Elmau, Germany, June 26 (Reuters) – US President Joe Biden told allies “we have to stay together” against Russia, as world leaders met Sunday at a G7 summit in the Bavarian Alps that will be dominated by the war in Ukraine and its painful impact on the country. Food and energy supplies worldwide.

At the start of the meeting, four members of the Group of Seven rich nations moved to ban imports of Russian gold as part of efforts to tighten sanctions on Moscow and cut off its means of financing the invasion of Ukraine.

However, it was not immediately clear if there was consensus on the move, with European Council President Charles Michel saying the issue would need to be approached with caution or risk backlash.

Western nations rallied around Kyiv when Russia invaded Ukraine in February, but after more than four months of war, that unity is being tested with soaring inflation and a lack of energy for its citizens.

A German government source said earlier that G7 leaders who have criticized Ukraine for not going far enough to punish Russia were also holding “really constructive” talks on setting a possible price cap on Russian oil imports.

At the start of a bilateral meeting, Biden thanked German Chancellor Olaf Schulz for showing leadership in Ukraine and said Russian President Vladimir Putin had failed to break their unity. Schultz faced criticism at home and abroad for his handling of the Russian invasion of Ukraine.

“We can get through all of this and come out stronger,” Biden said.

“Because Putin was counting on it from the start that somehow NATO and the G7 would split. But we didn’t, and we won’t.”

Britain said the ban on Russian gold imports is targeting wealthy Russians who buy safe haven bullion to reduce the financial impact of Western sanctions. Russian gold exports were worth 12.6 billion pounds ($15.45 billion) last year.

“The measures we announced today will strike directly at the Russian oligarchs and strike at the heart of Putin’s war machine,” British Prime Minister Boris Johnson said in a statement.

“We need to starve the Putin regime of funding. The UK and our allies are doing just that.”

Britain, the United States, Canada and Japan will ban Russian gold imports. France also supported this move.

On the oil price ceiling and the gold import ban, Michel said the issue needed further discussion.

“I am careful and cautious, we are ready to go into the details,” he said. “We are ready to make a decision with our partners, but we want to make sure that what we decide will have a negative impact (on Russia) and not a negative impact on ourselves.”

As missiles struck the Ukrainian capital of Kyiv on Sunday, hitting an apartment building and a kindergarten, Foreign Minister Dmytro Kuleba said the G7 should respond with more weapons and tougher sanctions against Russia. Read more

Biden called the strikes “barbaric.”

unit message

The summit takes place against a darker backdrop than last year, when the leaders of the Group of Seven nations – Britain, Canada, France, Germany, Italy, Japan and the United States – met for the first time since the start of the COVID-19 pandemic.

When delegates arrived at Schloss Elmau castle at the foot of the Wetterstein Mountains, they were greeted with flowers while Riflemen stood in the mountains of Bavaria in the sun.

The leaders are expected to discuss options to address rising energy prices and to replace Russian oil and gas imports. They also want to avoid sanctions that could increase inflation and exacerbate the cost-of-living crisis affecting their residents.

Soaring global energy and food prices are hurting economic growth in the wake of the conflict in Ukraine, with the United Nations warning of an “unprecedented global hunger crisis”. Read more

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

The summit provides an opportunity for Schultz to show more assertive leadership on the Ukraine crisis.

Schultz vowed to revolutionize German foreign and defense policy after the Russian invasion in February, promising to strengthen the army and send weapons to Ukraine. But his critics have since accused him of dragging his feet and sending mixed messages.

This year, Schulz invited Senegal, Argentina, Indonesia, India and South Africa as partner countries to the summit.

Many southern countries are concerned about the collateral damage from Western sanctions.

An EU official said the G7 nations would convince partner nations that the food price hikes they had hit were the result of Russia’s actions and that there were no sanctions targeting food. It was also a mistake to think of the Ukraine war as a domestic matter.

“It’s more than that,” the official said. “He’s questioning order and the post-World War II order.”

Additional reporting by Sarah Marsh, Andrea Shalal, Philip Blinkensop, John Irish and William Schomberg; Editing by Raisa Kasulowski Writing by Sarah Marsh and Mathias Williams Editing by Peter Graf and David Goodman

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