Russia-Ukraine war, debt impasse cloud G20 finance chiefs’ final-day talks

The final day of the gathering of the world’s top finance chiefs approached its conclusion with prospects for a consensus statement in doubt due to disagreements over language on Russia’s war and debt restructuring proposals.

“We’ll see how the day breaks,” as it “remains to be seen” whether the participants can reach a communiqué at the end of the Group of 20 meetings in Bengaluru, Australian Treasurer Jim Chalmers said on the sidelines. He said negotiators were up until 2 a.m. early Saturday, with two sticking points being the war and debt.

By mid afternoon, there were few signs that finance chiefs could break the deadlock. An eighth draft of a communiqué obtained by Bloomberg News showed lingering tensions over language about Russia’s war in Ukraine and debt restructuring.

“We’re witnessing a tectonic shift in the world order that has served us since the end of World War II,” Nadia Calvino, Spain’s deputy prime minister, told reporters.

Discussions toward finding a common language to describe the world’s challenges “are getting more difficult as the war goes on,” Calvino said. Still, G-20 nations “are making progress on the different issues,” she said.

Geopolitical tensions have been a cloud over talks at the meetings of Group of 20 central bank governors and finance ministers, with China a focal point in negotiations on each of the top issues. A US-led coalition has called for more pressure on Vladimir Putin’s regime as the conflict reached the one-year mark Friday.

Kristalina Georgieva, managing director of the International Monetary Fund, tried to look for positives from the global sovereign debt roundtable that has brought public and private creditors together at the negotiating table, with a baseline commitment to find some common ground.

Georgieva called China’s participation “constructive” in an interview with Bloomberg Television’s Haslinda Amin Saturday, adding that those officials had a responsibility as a big lender to be a central part of negotiations.

The IMF chief urged a memorandum of understanding on Zambia, the first African nation to default, as soon as possible. She said the country has done “an amazing job” reforming the economy and deserved progress in talks with creditors.

Still, there was little sign of any concrete progress on crucial debt restructuring talks. Failure to strike an agreement between key creditors risks prolonging a deadlock that has stalled restructuring programs in countries like Zambia and Sri Lanka.

The kind of meeting-ending communiqué that was reached in Bali in November among G-20 leaders is in doubt — with the likelihood growing that host nation India may instead issue a “chair’s summary” outlining the varying stances on issues this week.

“We cannot be complacent in the face of that war,” Georgieva said, referring to her own European heritage and noting that the First and Second World Wars spread due to complacency.

Leaders also highlighted the ongoing fight against inflation as a top priority. US Treasury Secretary Janet Yellen told Bloomberg News in an interview Saturday that “inflation continues to be a problem” and that “the data we’ve seen suggests it’s not yet under control, but it’s come down.”

Georgieva separately urged central banks to “stay the course” for a return to price stability that’s critical to investors and consumers alike.