Updates with Yellen quote.
Group of Seven finance ministers were due to discuss fresh sanctions against Moscow and increased support for Ukraine on Thursday, a day ahead of the first anniversary of the Russian invasion.
Sanctions imposed on Russia in the wake of its invasion of Ukraine had been having a “very significant effect” on Moscow’s economy, U.S. Treasury Secretary Janet Yellen said ahead of the meeting in Bengaluru, India on Thursday.
“The way I see it our sanctions have had a very significant negative effect on Russia so far. Russia is now running a significant budget deficit,” Yellen added.
French Finance Minister Bruno Le Maire was keen to stress that the measures imposed have so far had almost halved Russia’s oil revenues, telling reporters that they had “totally disorganized value chains in Russia, notably in industries as strategic as aeronautics and automobiles.”
He said the meeting should also discuss a fresh $16 billion International Monetary Fund (IMF) package for Ukraine over four years.
A senior U.S. official said last week that the United States and its G7 allies planned to unveil “a big new package of sanctions” around the Feb. 24 anniversary, including measures to crack down on loopholes and the evasion of existing measures.
“We are seeing the Russians get quite clever — everything from importing laptops and refrigerators through third countries, including sometimes our own countries, which they then strip-mine for chips and other things that go into their war machine,” said Victoria Nuland, Under Secretary of State for Political Affairs.
But it was unclear what fresh measures, if any, the ministers would agree on in India.
German officials played down expectations that any decisions on sanctions would be made at the meeting.
It comes ahead of a gathering of G20 finance chiefs and central bank heads on Friday and Saturday in Bengaluru to discuss the dire economic effects of the war and possible debt relief for poorer nations.
About 15% of low-income countries are in “debt distress,” the IMF said. A record 349 million people in 79 countries face “acute food insecurity.”
Any discussion on Ukraine is awkward for host India, which has not condemned the invasion. India wants to avoid the word “war” in any final statement, Bloomberg News reported.
It was unclear what level of involvement Russia would have in the wider G20 meeting. German officials said no high-ranking Russian representative would be present.
A planned meeting of G20 foreign ministers in New Delhi on March 1-2 could also be tense, as both Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Antony Blinken are expected to attend.