The G7 disappoints on the energy and food crises | Business | Economic and financial news from a German perspective | DW

His torso is pierced by several arrows, but there is still something cheerful about him: tied to a tree and wearing a simple loincloth, Saint Sebastian smiles at you, bleeding, according to a mural painted on the wall of an apartment building in the picturesque Bavarian town of Garmisch-Partenkirchen. For weeks, the cobbled streets of the ski resort near the Zugspitze, Germany’s highest peak, have been swarmed by police and organizers tasked with organizing this year’s Group of Seven rally.

Speaking at the final of the three-day event at the nearby Schloss Elmau hotel, host and German Chancellor Olaf Scholz also appeared to be smiling through the pain. His arrows? Energy prices, inflation, climate change and, above all, the war in Ukraine.

The 2022 G7 summit ended with little action on high food and energy prices

Putting the brakes on climate targets

On energy, the leaders of the G7 – made up of Germany, France, Italy, Japan, Canada, the United States, the United Kingdom and the special member of the EU – used their time together in the mountains to think about how to reduce the high cost of energy while meeting commitments to reduce dependence on fossil fuels.

Much to the chagrin of environmental activists, the group emerged from the summit with a softened stance on the latter, saying the war in Ukraine means time-limited support for new natural gas extraction projects may be needed.

“The gas will be temporarily needed and that’s why there can be investments that make sense, in this transition phase, and therefore need to be supported,” Scholz told reporters on Tuesday.

Oil price cap still in progress

As for the high cost of energy, the idea of ​​capping the price of Russian oil had caused a stir in the days preceding the summit. Russian oil embargoes during the war in Ukraine had the unintended but predictable effect of driving up the world price of crude, to the benefit of the main exporter, Russia. A cap could lower energy prices for consumers and businesses while hitting Russia’s war chest.

Despite their apparent enthusiasm, the leaders ultimately only announced an agreement to “explore” a ban on transporting Russian oil sold above a certain price.

“The idea of ​​putting a ceiling is a very good idea,” French President Emmanuel Macron said on Tuesday, but he warned of a “technical difficulty” in implementing it.

The event produced an agreement between at least some of the group’s members to stop buying newly mined gold from Russia, one of the world’s largest producers.

Small hunger relief

Besides hurting Russia, the summit also focused on helping Ukraine. The leaders pledged more than 30 billion euros ($31.6 billion) in budgetary and humanitarian aid.

To tackle an ever-growing global hunger crisis, intensified by the fallout from war, the G7 also said it would provide $4.5 billion (€4.3 billion) to fight hunger. Activists criticized the announcement.

“The $4.5 billion pledged is far too little to end the global food crisis and stop people from continuing to go hungry,” Charlotte Becker, advocacy and campaign director at Oxfam, said in a statement. a statement. “At least an additional $28 billion is needed to eradicate hunger and fund United Nations appeals for help.

An informal club of some of the world’s richest countries, the G7 is regularly criticized for its outsized influence on the global economy and its lack of follow-through on commitments. While, according to figures from the World Bank, the combined GDP of its members represents 45% of the world economy, the growth of other economies caused this figure to fall by almost 70% thirty years ago.

German Chancellor Olaf Scholz leaves the G7 summit in Elmau 2022

G7 leaders unveil revamped plan to invest $600 billion in infrastructure projects in developing countries

struggle for influence

The group is increasingly concerned about China’s growing role on the world stage, especially since the launch of Beijing’s Belt and Road Initiative. The infrastructure project has invested or lent billions of dollars to the poorest countries in recent years.

Anxiety about China surfaced repeatedly at the summit. On Monday, G7 leaders unveiled a plan to mobilize $600 billion in public and private money for its own investment in infrastructure projects in developing countries.

European Commission President Ursula von der Leyen said the measure was intended to “show our partners in the developing world that they have a choice”.

It’s a plan that seems familiar to some.

“It was a big topic on the agenda last year,” Stormy-Annika Mildner, executive director of think tank Aspen Institute Germany, told DW. “And not much has happened since. Now they’ve created a new alliance, which I have to say is a bit like what they created last year. But it seems more concrete.”

Edited by: Milan Gagnon