‘We will continue to provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes,” says the text of a draft statement, seen by Bloomberg, by the Group of Seven leaders meeting in Bavaria.

The wording is important because members of the alliance are concerned about the war dragging on and some, including Germany and France, have hinted that they may be more open to the idea of a negotiated ceasefire.

The G7 leaders are also weighing the possibility of using revenues from tariffs on imports from Russia to support Ukraine, according to the document.

Earlier, leaders discussed how to coordinate action to tackle soaring inflation and ward off the threat of recession, as well as how to keep up the pressure on Russia. With the war raging about 1,200km to the east of Schloss Elmau, where the summit is taking place, German Chancellor and host Olaf Scholz was also leading talks on Sunday on addressing climate change and on infrastructure and investment.

Key developments

• Dazzling mountain views can’t hide darker mood among G7 leaders
• UK says ban on new Russian gold imports to be unveiled at G7
• US resuscitates bid at G7 to counter China’s Belt and Road
• G7 negotiators put Russia oil price cap on agenda for leaders
• Scholz targets turnaround after stumbling start as German leader

US resuscitates bid to counter Belt and Road

US President Joe Biden rebooted his effort to counter China’s flagship trade-and-infrastructure initiative after an earlier campaign faltered.

The Build Back Better World initiative, named after Biden’s domestic spending and climate agenda, struggled to get off the ground because not enough G7 partners contributed financially when it was unveiled a year ago, according to people familiar with its lack of progress. European officials cited the Biden administration’s inability to get its own ambitious economic legislation through Congress.

Johnson aide dismisses talk of strains with Biden

UK Prime Minister Boris Johnson’s official spokesman pushed back against the idea that his boss has a strained relationship with Biden, dismissing the lack of the typical publicly scheduled bilateral meeting between the pair at the summit.

Johnson and Biden “will have many hours of discussions” at both the G7 meeting and the Nato summit in Madrid starting on Tuesday, spokesman Max Blain told reporters, adding he believed Biden was only meeting the host leaders at each event.

Pressed on whether Johnson’s relationship with Biden was strained, Blain said: “I think that would be utterly the wrong conclusion to draw.”

G7 worried about economic outlook — Scholz

German Chancellor Olaf Scholz said that leaders had detailed discussions on the current energy crisis and inflation surge, which they all agreed were a cause for concern, and that they were determined to tackle the risks to their economies “in a coordinated way.”

“Sinking growth rates in some countries, rising inflation, scarce raw materials and disruption to supply chains are not small challenges,” Scholz told reporters during a break in the talks.

“That’s why we have to take responsibility jointly but I am very, very, very optimistic that we will be able to send a very clear signal of unity and decisive action from this summit,” he said. “The fact that we are united means that we can tackle the risks in a coordinated way, and that we can mobilise investment and supply chains together.”

Uncertainty over Biden-Johnson bilateral

The US and the UK have in their own words a “special relationship,” one that the British bring up far more than the Americans and that is best exemplified by the Ronald Reagan and Margaret Thatcher meeting of minds. So for every G7, the bilateral between an American president and a UK prime minister is one of the most watched moments, especially with a character as colourful as Johnson.

The meetings are dissected and pored over by the UK press. That is why it’s quite unusual that no such bilateral has been pencilled in between Biden and Johnson, especially as the two have been working extremely closely on Ukraine and coordinating actions and words. White House officials said Biden planned multiple meetings, but so far only the meeting with the G7 host has been made public.

Asked directly about it, a US official said Biden would be in Germany for three days and there would be lots of opportunities for the leaders to interact at dinners and on the margins of the sessions, a line repeated by the prime minister’s spokesman. Both Johnson and Biden will travel on to a Nato summit in Madrid next week so there will be more chances to talk. Nevertheless, the ambiguity around a bilateral that was always pretty much a sure thing is notable.

Kuleba wants more G7 sanctions on Russia

Ukrainian Foreign Minister Dmytro Kuleba called on the G7 to respond to Russia’s missile attack on Kyiv with more sanctions and additional deliveries of heavy weapons.

Kuleba tweeted a photograph of what he said was a seven-year-old Ukrainian child whose home in the capital had been hit by a Russian cruise missile. “Many more around Ukraine are under strikes,” Kuleba said. “Russia’s sick imperialism must be defeated.”

Russian missile strike ‘barbarism’ — Biden

Biden condemned a Russian missile strike on Kyiv earlier on Sunday, telling reporters it was “more of their barbarism”.

Four Russian missiles struck residential buildings in the centre of the Ukrainian capital following widespread bombardments in the north and west of the country on Saturday, including missile launches from Belarusian airspace.

Russia’s defence minister made his first visit to troops serving in Ukraine, while President Vladimir Putin met with his Belarusian counterpart and promised nuclear-capable missile systems.

France not opposed to oil price cap

While France is not opposed to the US proposal for a price cap on oil, it wants a broader discussion with oil producers, according to a senior French official. EU sanctions have a stronger impact on Russia than a potential oil-price cap, added the official, who asked not to be identified by name.

G7 leaders will also address the nuclear talks with Iran, and Iranian output should be part of discussions on oil prices, the official said.

Michel says G20 is crucial, even with Putin

European Council President Charles Michel wouldn’t rule out attending the G20 in Bali in November even if Putin goes, saying multilateral channels could be a forum for delivering international condemnation of the invasion in Ukraine.

“It would be difficult to sit at the same table with Vladimir Putin. On the other hand, we support a multilateral approach, we support international cooperation,” said Michel, who heads the forum of EU leaders. “Do we want to kill the G20, which is an important body, especially in those circumstances?” Indonesia, the current chair of the G20, has invited the Russian leader to attend as well as Ukrainian President Volodymyr Zelensky.

Biden says G7 ‘won’t splinter’

Scholz welcomed Biden for their one-on-one talks against the stunning mountain backdrop in Bavaria’s Schloss Elmau. In 2015, Angela Merkel bonded with then president Barack Obama when the G7 summit was held at the same venue, cementing their close relationship, so there was a lot of attention on what kind of chemistry Biden and Scholz would project.

The body language was somewhat stiff, with Scholz barely speaking, though Biden tried to warm things up by reminiscing about his skiing experiences. As they sat down, Biden reminded Scholz about their most important priority at the meeting: to show a united front against Putin.

“We have to stay together because Putin has been counting on from the beginning that somehow Nato would — and the G7 — would splinter,” Biden said. “But we haven’t and we’re not going to. So can’t let this aggression take the form it has and get away with it.”

Johnson repeats ‘Ukraine fatigue’ warning

The UK’s Johnson said it’s inevitable that citizens and politicians will grow weary of the war in Ukraine and stressed the need for continued unity in the international alliance ranged against Russia.

Asked if he was worried about a fracturing of support for the government in Kyiv, Johnson told reporters: “I think the pressure is there and the anxiety is there, we’ve got to be honest about that.”

“We’ve got to have really, really honest discussions about the implications of what’s going on, the pressures that individual friends and partners are feeling, that populations are feeling — whether it’s on the costs of their energy or food or whatever,” he said.

Russia hours away from default

After months of teetering on the edge of default, Russia is now just hours away from a dramatic moment in the financial battle that the US and others have waged against the Kremlin over its invasion of Ukraine.

A grace period on about $100-million of missed bond payments — blocked because of wide-ranging sanctions — ends on Sunday night. There won’t be an official declaration, and Russia is already disputing the designation, but if investors don’t have their money by the deadline, there will be an “event of default” on Monday morning, according to the bond documents.

G7 ‘sherpas’ agree leaders should discuss oil cap

G7 leaders are also set to discuss a potential price cap on Russian oil during the three-day meeting, even as many of the details of the complex mechanism remain unresolved. Negotiators known as sherpas held what one official described as “intense” talks on the Russian oil cap before the summit, according to people familiar with the discussions.

Such a price mechanism would set an upper limit on imports of oil from Russia, which would be imposed unilaterally by each participating country and prevent Russia from selling at a higher price.

Russian gold ban ‘will have global reach’

The UK, the US, Japan and Canada plan to unveil a ban on new gold imports from Russia, which Britain said will have a “huge impact” on Putin’s ability to fund his armed forces.

Underpinned by London’s central role in the gold trade, the import ban on Russian gold “will have global reach, shutting the commodity out of formal international markets,” the UK said in a statement.

The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war against Ukraine.

Shipments between Russia and London have collapsed to almost zero since sanctions were imposed on Russia for its invasion of Ukraine. The London Bullion Market Association, which sets standards for that market, removed Russian gold refiners from its accredited list in March. DM