(Bloomberg) — Group of Seven finance chiefs are set to make their biggest appraisal yet of how the world has changed since the start of Russia’s war in Ukraine some 80 days ago sparked a new inflation shock and threatened post-pandemic recoveries.
Following a virtual discussion on March 1 and a brief gathering during the World Bank/International Monetary Fund meetings in April, ministers and central bank governors will convene in person for days of talks starting Wednesday.
The G-7, an economic grouping conceived during the mid-1970s, is confronting echoes of that bleak era, from energy crises to the specter of Russia’s aggression — at that time with its invasion of Afghanistan, and now against Ukraine.
Even the location of their gathering, in and close to Bonn, the former capital of West Germany, evokes the Cold War division of Europe.
Since finance ministers pledged on April 20 to “sustain and increase our coordinated pressure,” plenty has happened to consider, not least of which is persistent inflation across much of the world.
The global monetary response has become pronounced: the US Federal Reserve raised interest rates by a half point, and several counterparts have shifted their stance, including the European Central Bank, which aims to hike in July.
But as with the 1970s, bigger solutions to the challenges posed by the international standoff remain elusive. And just like then, when Germany was first in line for attack, the host country is the most vulnerable to Russia’s response if President Vladimir Putin raises the stakes and shuts off gas supplies to…
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