russian strategies to evade sanctions are prolonging the war. Coordinated action by the G7 is necessary to close the loopholes: Sergii Marchenko at the meeting of the G7 financial bloc
On May 11, Sergii Marchenko participated in a meeting of G7 finance ministers and central bank governors, along with leaders from the IMF, World Bank, and OECD. The objective of the session was to discuss Ukraine's economic situation, financing budget deficit, recovery of Ukraine, and the sanctions pressure on russia.
In the speech, Sergii Marchenko expressed gratitude to the partners for their extensive support for Ukraine, with special recognition to Japan for their unwavering dedication to Ukraine throughout the chairing in the G7 this year.. Over the course of the full-scale war, synchronizing partners' efforts to support Ukraine has enabled Ukraine to maintain stability and bravely resist the aggressor.
In response, the finance ministers, central bank governors, IMF, World Bank, and OECD leaders acknowledged Ukraine's efforts and assured continued support for as long as it is needed.
Regarding the state of the economy, Sergii Marchenko highlighted that the Government of Ukraine has consistently upheld macroeconomic and financial stability, maintaining a balanced budget. Thanks to significant financial support from international partners, the Ministry of Finance can promptly and fully finance critical needs.
"Ukraine has already received USD 16.7 billion in budgetary aid from foreign donors in 2023. Our partners have also assured us of ongoing support to finance the State Budget deficit this year. This includes the EU's large-scale Macro-Financial Program, the IMF's financial program, grant funding from the United States, concessional funding from Japan, and contributions from other countries. I am deeply grateful to the donors for their unprecedented efforts in mobilizing funds for Ukraine's urgent needs," stated the Minister of Finance of Ukraine.
Sergii Marchenko provided an overview of implementation of the measures agreed under the IMF Extended Fund Facility program:
"The IMF's decision to launch a full-fledged financial program for Ukraine amidst the war is of utmost importance, as it lays the foundation for the country's economic recovery and instills confidence in financial stability for the next four years. Recognizing this, the Government of Ukraine is making significant efforts to ensure timely progress in implementing the structural reforms identified in cooperation with the IMF."
Simultaneously, the Government of Ukraine's primary objective is rapid recovery, which is estimated at USD 14.1 billion for the current year. In particular, Sergii Marchenko noted that Ukraine's partners are already initiating projects aimed at mobilizing funds for priority needs. The World Bank has created two funds, the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF) and the Special Program for Ukraine's Recovery and Crisis Response (SPURR), the European Investment Bank has approved a new mechanism for financing reconstruction and recovery the EU for Ukraine Initiative, and the EBRD has launched the Crisis Response Fund.
Addressing the need to intensify sanctions on russia, the Minister of Finance of Ukraine emphasized that the G7 countries should close the loopholes that enable russia to continue importing Western technologies. It is crucial to impose additional restrictions on the russian energy sector and sanction russian banks.
"Every russian strategy that enables sanctions evasion prolongs the war against Ukraine. Only through a coordinated sanctions policy can a significant portion of the russian economy be cut off from Western technology, equipment, and finance imports, ultimately halting the aggressor," Sergii Marchenko added.
The Minister of Finance also urged partners to expedite the development of the legal framework and practical tools for utilizing confiscated russian assets abroad. russia must be held accountable and pay for its criminal actions against Ukraine.