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Global Economy

G7 grant Ukraine debt relief

In addition to military and humanitarian aid for Ukraine, there is now also financial support: by the end of 2023, Ukraine will no longer have to pay interest or repayments to the seven leading industrialized countries. The federal government suggested a debt moratorium for Ukraine during its G7 presidency.

Ukraine owes the equivalent of around one and a half billion dollars to the G7 countries. According to the World Bank, Kiev's foreign debt totals around $130 billion.

According to experts, even before Russia's war of aggression Ukraine was in debt to a critical extent. But the fighting since the end of February has left large parts of the Ukrainian economy idle, which is why the country is also considered financially unstable.

Private investors should also join

So for the time being, the G7 countries are waiving all claims for reimbursement. According to reports, the first large investors have already followed the government's call for private creditors to join the moratorium.

Debt moratoria are considered an effective way of stabilizing the economic situation of crisis states. The "Jubilee Year" initiative, sponsored by the two Christian churches in Germany, which has long called for haircuts for many developing countries, welcomed the postponement for Ukraine. A spokesman said it was "definitely a step in the right direction" to support Ukraine.

Temporary moratorium already during the pandemic

In spring 2020, after the outbreak of the corona pandemic, the industrialized countries had issued a temporary debt moratorium for a total of almost 80 countries in the Global South. The governments of these countries were able to use more than 12 billion dollars to fight the virus.

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