G7 leaders launch infrastructure fund to counter Chinese influence

Leaders of the Group of Seven (G7) began three days of talks on Sunday in Germany's Bavarian Alps with Russia's invasion of Ukraine set to dominate the agenda.

German Chancellor Olaf Scholz and US President Joe Biden are also set to discuss proposals to tackle the sharp rise in food and oil prices across the world, as well as inflation, with the leaders of Canada, France, Italy, Japan and the United Kingdom.

One of the first announcements was a $600 billion (€568 billion) infrastructure initiative to help developing countries tackle climate change.

Russian gold exports outlawed

Shortly before the summit began, London announced in a statement that the UK, along with the US, Japan and Canada, would ban new imports of Russian gold to tighten the economic effect of sanctions on Russia.

The joint action "will directly hit Russian oligarchs and strike at the heart of Putin's war machine," British Prime Minister Boris Johnson said in the statement. 

Washington said the decision will be formally announced as a G7 move on Tuesday.

The UK said that Russian gold exports reached around $15.5 billion in 2021 and that this figure has gone up since sanctions were imposed as a means of getting around them.

Biden-Scholz hold bilateral talks

Scholz and Biden held a bilateral meeting on the sidelines of the G7 summit, where the US president complimented the German chancellor for "stepping up" to hike defense spending by €100 billion ($106 billion).

He added that Germany was one of Washington's most important allies after the two appeared briefly before the press.

Biden also said the G7 states and the NATO alliance must "stay together" in the face of Russia's invasion.

German Chancellor Olaf Scholz welcomes U.S. President Joe Biden ahead of their meeting on the first day of G7 leaders summit at Bavaria's Schloss Elmau castle

Biden pushed back against criticism of Scholz's leadership, praising the chancellor for marshalling Europe's response to Russia's invasion of Ukraine

G7 Infrastructure fund announced

G7 leaders later held a news conference to pledge hundreds of billions of dollars to counter China's growing influence in developing countries.

Beijing has been accused of trapping low-income countries into unaffordable debts to be part of its trillion-dollar Belt and Road Initiative (BRI), which is seen as expanding China's trade power with Africa, Asia and Europe.

The new G7 fund will focus on climate initiatives, among other projects, including a $2 billion solar farm investment in Angola, $320 million for hospital construction in Ivory Coast and $40 million to promote regional energy trade in Southeast Asia.

Speaking after the first day's working session, the German chancellor expressed optimism in the face of major global challenges exacerbated by the Ukraine conflict.

"Our work on promoting infrastructure globally is also affected by the current geopolitical situation," he said. "We have therefore discussed how our investment globally in climate-neutral and low carbon energy, including gas, can help us as a temporary response to Russia's use of energy as a weapon."

What else is on the agenda?

The G7 leaders are also due to tackle climate change, with Germany pressing for the creation of a "climate club" to set practical targets for reducing emissions for the participating countries.

EU Council President Charles Michel said during a press conference that the EU welcomes the "climate club" proposal, stressing the need to diversify energy sources and speed up renewable energy infrastructure.

He also highlighted the importance of tackling the food security crisis, partly by getting Ukrainian food products to the global market and by supporting the EU's partners that have been most hit by food shortages.

Some 200 protesters set off around midday in the small town of Garmisch-Partenkirchen, close to the Elmau castle where the summit is being held.

Organizers told the dpa news agency that they expected the number of protesters to increase to around 2,000. A large number of police officers were also present to escort the demonstration.

Protesters dressed up as world leaders holding a banner that reads stop burning our planet

A larger protest took place in the nearby major city of Munich on Saturday, but with significantly fewer than the expected 20,000 participants.

German police on Sunday said that four protesters from the Munich march had been arrested under charges of having caused bodily harm.