The war in Ukraine is looming large at a meeting of the G7 nations
A MARTINEZ, HOST:
Leaders of the seven wealthiest democracies began three days of talks yesterday in Germany's Bavarian Alps. Russia's invasion of Ukraine is set to dominate the agenda.
RACHEL MARTIN, HOST:
But the other dominant theme is China. One of the first announcements out of the G-7 was a $600 billion infrastructure initiative to help developing countries counter China's Belt and Road Initiative.
MARTINEZ: NPR's Rob Schmitz joins us now from Berlin. Rob, G-7 leaders are seeking a deal to impose a price cap on Russian oil and pipeline gas to curb Moscow's ability to finance its war in Ukraine. Tell us more about what's on the table here.
ROB SCHMITZ, BYLINE: Yeah, the idea here would be for the U.S. and Europe to set a fixed price for Russian oil that is below the market rate so that Russia would lose revenue for its war in Ukraine and so that inflationary pressures here in the West recede a little. The argument among G-7 leaders is that, at least in the short term, Russia doesn't have many alternative markets to sell its oil, so it would have to agree to a price cap. But it's clear there is demand for Russian oil in Asia, India and China, for example. So it's unclear whether this would work.
MARTINEZ: And is there a possibility that this price cap idea could maybe backfire?
SCHMITZ: Oh, yeah. The country most skeptical of this plan is probably Germany. It relies on Russia for around a third of its natural gas and will continue to import Russian oil alongside much of the rest of the EU through the rest of the year before an EU-wide oil ban kicks in. Germany needs this energy to keep its economy running, and last week Russia cut gas flows into Germany by 60%. So there's concern here that a new price cap on oil could backfire and prompt Russia to simply cut off oil and possibly gas unilaterally, which would be a big blow to the European economy.
MARTINEZ: And I know President Biden used this G-7 summit to announce the Partnership for Global Infrastructure and Investment. What's the aim of this? And why now?
SCHMITZ: Yeah, so this is a $600 billion infrastructure plan to help developing countries deal with climate change, help them build health care infrastructure and help promote gender equality. President Biden announced a solar farm project in Angola, hospital construction in Ivory Coast and regional energy trading platforms in Southeast Asia. Here's what he said about the plan.
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PRESIDENT JOE BIDEN: I want to be clear. This isn't aid or charity; it's an investment that will deliver returns for everyone, including the American people and the people of all our nations. It'll boost all of our economies. It's a chance for us to share our positive vision for the future.
SCHMITZ: And, A, Biden said it's also a chance to pull the developing world closer to the Democratic West instead of towards the orbit of China, whose Belt and Road Initiative is the competing infrastructure development plan for the developing world.
MARTINEZ: And, Rob, one another thing - because shortly before this summit began, the United Kingdom announced that it, the U.S., Japan and Canada would ban imports of Russian gold as part of the latest measures taken against Russia. What will that mean?
SCHMITZ: Well, the Biden administration said this will be formally announced tomorrow at the summit. British Prime Minister Boris Johnson says banning Russian gold imports will directly hit Russian oligarchs and strike at the heart of Putin's war machine. Russian gold imports to the U.K. reached $15.5 billion dollars last year, and this figure has only gone up since sanctions were imposed. It's been a way that Russia's government has tried to get around the sanctions. But then again, it's unclear whether the EU will join their allies on this initiative.
MARTINEZ: That's NPR's Rob Schmitz joining us from Berlin. Rob, thank you very much.
SCHMITZ: Thank you. Transcript provided by NPR, Copyright NPR.