G7 states promise further aid to Kyiv
At their summit meeting at Schloss Elmau in Bavaria, the heads of state and government of the leading Western industrial powers have demonstrated unity via-à-vis Russia. They resolved to continue supporting Ukraine for "as long as it takes". They also pledged roughly 567 billion euros in investments to support emerging and developing countries. What can this achieve?
Italy's strategy weakened
At best, the decision to cap energy prices of which Italian Prime Minister Mario Draghi is the keenest proponent will be postponed once more in the final declaration, La Stampa laments:
“The fact that Draghi was unable to push through his strategy at the meeting of the twenty-seven last week weakens the Italian line. Biden has no objections to this approach in principle, but he's not prepared to put pressure on Scholz - or, in effect, all the European partners. The commitment Draghi is pushing for is a mandate to the G7 energy ministers to 'urgently consider the application of a price cap' on energy products. The sense of urgency is helping the prime minister maintain the pressure on the 27, but they are determined to put everything off until October.”
Contradicting the laws of the market
Kommersant doesn't believe that the US's proposal for a cap on the price of Russian oil can work:
“Anyone who has ever been confronted with government attempts to fix prices on a commodity that is in high demand - be it sugar, petrol or dollars - can see just how utopian this idea is. The laws of economics are as fixed as those of physics: when the demand for a commodity increases, so does its price. And if you try to artificially lower that price you create a deficit and a black market where the price will be even higher because market participants factor in the extra costs and increased risks associated with the restrictions.”
First steps towards a new world order
The Frankfurter Rundschau praises Olaf Scholz for inviting the heads of state and government of India, Senegal, South Africa, Argentina and Indonesia:
“Even if Schloss Elmau is not yet the scene of deep-seated fraternity, Scholz is leading the way with his concept for a new world order. He wants to rally democracies against Russia - and also against China. Almost all G7 countries are in favour of launching an investment initiative for poorer countries in order to compete with Beijing. Yes, this G7 summit may be expensive and lacking in climate consciousness, like the ones before it - but it certainly isn't a self-congratulatory talking shop.”
Not always a good idea to match Beijing's pace
The Neue Zürcher Zeitung warns of a temptation that could result from the G7's 600-billion-dollar investment plan:
“China has a reputation among development experts for being supposedly generous, granting funds to other states which it then uses to bind them to itself. While the Europeans are still brooding over the economic feasibility of a project, offering help for self-help, and negotiating environmental conditions, the Chinese money and quite often a Chinese construction team too have long since arrived on location, they say. This makes it tempting for the West to occasionally turn a blind eye in the race with China and to grant a loan quickly rather than not at all. But the temptation to do this should be resisted by the EU and the G7 countries.”
Superfluous summits
The G7's meetings achieve nothing, the business paper Les Echos criticises:
“What was not resolved before will never be resolved here. The G7 should consolidate the Paris Agreement? We're now looking on as coal makes a comeback. It should try to stop the war? It's bogged down as never before, and Putin's expulsion from the short-lived G8 after his invasion of Crimea has done little to discourage him from taking further steps. It should prevent the escalation of the cold war between Beijing and Washington? The very opposite is happening after Xi Jinping held a rival summit with the Brics countries together with Putin three days ago.”
G7 no longer as strong as it once was
The West has lost economic power and consequently political clout massively since the 1990s, economist Lukáš Kovanda writes on Echo24:
“Nothing groundbreaking can be expected from the G7 summit. Any effective sanctions that the West had at its disposal are already in force. They are having a noticeable impact on Russia, but only gradually. What weakens the countries of the West, however, is that they no longer dominate the world economically, as they did in the 1990s. If economies like China, India, Indonesia, Saudi Arabia and others could be brought on board with the sanctions against Russia, they would be infinitely more effective. But that isn't going to happen.”
A chance to stop Putin
The G7 summit offers an opportunity to forge a greater alliance against Russia, comment political scientists Dina Smeltz and Susi Dennison in La Libre Belgique:
“To honour Ukraine's fierce struggle and increase the economic pressure of international sanctions, the G7 countries must now step up their military support and tighten sanctions. A strong transatlantic alliance will not be enough to mobilise the international system and hold Russia to account. But it can provide a solid foundation from which to spur on other global partners to join forces and maintain the possibility of peace and justice.”
Finding their place in the new world order
At the very least this alliance could bring some stability to the global chaos, the Tages-Anzeiger writes:
“If the G7 guests - from Argentina to India to Senegal - understand that it is to their advantage to side with regulated free trade and democracies, it would be a victory in this age of new bloc-building. ... There will be no return to the globalisation of the noughties and twenty-tens. Russia has left the circle of Western states. China has decided (under Xi Jinping at least, and in any case until the next party congress) to play the dividing game on Putin's side. So the G7 societies don't have many options left: they must find their place in the new world order and cushion the blows.”
Push through price cap on Russian oil
Corriere della Sera hopes for clear words on the possibility of a price cap on oil:
“There is still some uncertainty about the US proposal to introduce a price cap on Russian oil, which would have the double effect of limiting Russia's financing capacities and also cushioning the impact on energy prices in the West. The idea, proposed by Biden and supported by France and Italy, is still meeting with reservations in Germany. ... To be effective, the measure would have to be applied by a large number of countries going far beyond the G7 and starting with the 27 countries of the European Union.”