A ban on gold imports, which could cost tens of billions of dollars in fines, has emerged as the main new economic sanction aimed at pushing Russia out of the summit. Administration officials declined to comment on whether further punitive action would be taken.
“The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war on Ukraine,” Biden said. tweeted Sunday morning, noting that gold is “a major export that brings in tens of billions of dollars for Russia.”
Biden and other leaders of industrialized countries have started their meetings in southern Germany on Sunday for a summit that is expected to be dominated by discussions of the fallout from the war in Ukraine.
Biden, who arrived late Saturday evening, attended mass with a US Army priest before starting his day with a bilateral meeting with German Chancellor Olaf Scholz to discuss the war.
The two leaders had a little chat as Biden, silhouetted by the Alps, joked that he had skied a lot but hadn’t in a while. “It’s beautiful,” he remarked.
The conversation then turned more serious, with Biden thanking Scholz for Germany’s resolve and ability to keep the alliance together. “We have to stay together. Because Putin was counting from the start that NATO and the G-7 would part ways one way or another,” Biden said. “But we haven’t, and we’re not going to.”
In the afternoon, summit leaders announced a new global infrastructure investment agenda, with the aim of mobilizing $600 billion in public and private investment by 2027. The spending targets – the US pledging $200 billion – would go to improving health, communications and energy infrastructure in low- and middle-income countries. It aims to help counter ambitious global spending by China, which has invested heavily in Africa and Asia through its Belt and Road Initiative.
“Our nations and our world stand at a true inflection point in history,” Biden said.
Some of the initial projects that Biden administration officials highlighted include a $2 billion project to develop a solar panel project in southern Angola; building telecommunications cables that would link Singapore to France via Egypt and the Horn of Africa, extending high-speed internet access; and the construction of a large manufacturing plant for multiple vaccines in Senegal.
The day also included hints of disagreements between some of the top leaders, including French President Emmanuel Macron and British Prime Minister Boris Johnson.
In a statement, Downing Street said Johnson had “emphasized” to Macron that “any attempt to settle the [Ukraine] the current conflict will only cause lasting instability and will give Putin the right to manipulate both sovereign countries and international markets in perpetuity.”
The remarks appeared to be a critique of Macron’s comments in mid-June that Ukrainian President Volodymyr Zelensky and his officials will have to negotiate with Russia at some point. Before Macron, Scholz and other European leaders traveled to the Ukrainian capital of Kyiv, the comments raised fears among Ukrainian officials that France and Germany were pushing for talks with Russia amid the economic toll of the war escalates.
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French officials dismissed such concerns and said it was up to Ukraine to determine when the time for talks was right. A spokesman for the French presidency said on Sunday that Macron and Johnson “had a discussion on Ukraine during which the president firmly reaffirmed his determination to support Ukraine.”
France has delivered or pledged almost a quarter of its existing stockpiles of Caesar artillery weapon systems to Ukraine, and the country’s lesser dependence on Russian fossil fuels has allowed France to become one of the first champions of a European Union embargo on Russian oil.
But Macron and Scholz have spoken to Putin several times on the phone since the invasion, drawing particular criticism in Eastern Europe.
The United States pushed for an agreement on a price cap on Russian oil imports to hurt Moscow’s ability to finance the war. G-7 leaders are heading towards a consensus on a price cap, according to a person with knowledge of Sunday’s talks who spoke on condition of anonymity to discuss the private talks.
The aim is to simultaneously cap the amount nations pay for Russian oil, hoping to hurt Moscow’s ability to finance the war, while trying to reduce inflation at the fuel pump. Soaring oil prices have hampered some of the countries’ efforts to diversify away from Russian energy since Moscow is paid more for less volume.
To entice other countries to participate, the leaders discussed ways to make it difficult to insure or ship Russian oil that does not meet the price cap.
At Sunday’s meeting, Macron stressed that a price cap should also cover gas. Price caps on Russian natural gas flowing through pipelines to Europe are seen as easier to enforce because the infrastructure means it cannot be sold elsewhere.
Scholz warned that an oil price cap would only be helpful if all buyers agreed. “The issues to be resolved are not trivial issues,” said a German official. “But we are on the right track to find an agreement.”
Italian Prime Minister Mario Draghi has raised concerns about the potential political ramifications of the price hike. “The energy crisis must not produce a return of populism,” he said, according to the individual with details of the discussion.
“Capping the price of fossil fuels imported from Russia has a geopolitical purpose as well as an economic and social purpose,” Draghi said. “We need to reduce our funding to Russia. And we must eliminate one of the main causes of inflation.
Biden calls for dramatic increase in aid to Ukraine
In a briefing with reporters ahead of the summit, administration officials touted the decision to ban gold imports as an important demonstration that the world’s largest economies are prepared to continue to punish Russia, one of the largest gold exporters in the world. The official announcement will take place on Tuesday, according to administration officials, and the US Treasury Department will make a formal decision to ban further gold imports.
“The United States has rallied the world by imposing rapid and significant economic costs to deprive Putin of the revenue he needs to fund his war,” one of the officials said, speaking on condition of anonymity in accordance with basic briefing rules.
The official hinted at additional steps that could be taken to further isolate Russia, but suggested these would come in the coming weeks, rather than more immediately as part of the summit.
“This is a key export, a key source of revenue, a key alternative for Russia, in terms of its ability to transact in the global financial system,” the official said. “Taking this action cuts off that capability and is yet another continuing illustration of the kinds of actions the G-7 can take collectively to continue to isolate Russia and cut it off from the global economy.”
One of the goals of the United States and its international partners, the official said, would be to prevent Russia – which has found ways to circumvent previous sanctions – from evading the import ban. The fact that they moved toward banning gold imports, administration officials said, was actually a sign that other ways for Russia to access global financial markets had been cut off.
Russian oligarchs, for example, have sought to buy gold bullion to avoid the financial impact of Western sanctions, and G-7 leaders hope that will send another signal to Putin’s key allies.
“The measures we announced today will directly affect the Russian oligarchs and strike at the heart of Putin’s war machine,” Johnson said as part of his own announcement regarding the ban on gold imports.
“We must deprive the Putin regime of its funding,” he added. “The UK and our allies are doing just that.”
Ashley Parker in Telfs, Austria and Annabelle Timsit in London contributed to this report.