Russia, China Water Down G20 Text on Geopolitical Tensions

G20 SUMMIT - JAKARTA. Russia and China watered down a G20 finance leaders' statement on geopolitical risks to the global economy as a contentious meeting ended on Friday, deleting a reference to "current" tensions as financial markets fretted over the prospect of war in Ukraine.

The gathering of finance ministers and central bank governors from the Group of 20 major economies was one of the most fractious since the start of the COVID-19 pandemic in 2020, according to people familiar with the discussions.

Canadian Finance Minister Chrystia Freeland strayed from the G20 economic script to issue an impassioned plea to her Russian counterparts to not invade Ukraine, warning that such action would hurt the global economy and bring "crushing" sanctions against Russia, according to two sources familiar with her remarks.

Other sources familiar with the meeting said China and Russia had objected to the reference to "current tensions" in an earlier draft communique, as well as disagreements on debt restructuring for poor countries and carbon pricing.

The group's final communique simply said: "We will also continue to monitor major global risks, including from geopolitical tensions that are arising, and macroeconomic and financial vulnerabilities."

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As the meeting concluded, U.S. and European stocks fell on worries that a Russian invasion of Ukraine was imminent after Russian-backed separatists announced a surprise evacuation of their breakaway regions in eastern Ukraine.

Debt Relief Standstill

The G20 talks, held virtually and in the Indonesian capital, Jakarta, were also marked by disagreements over the group's stalled debt restructuring framework.

The final communique failed to endorse International Monetary Fund and World Bank proposals for an immediate debt service suspension for poor countries that seek restructurings and an expansion to include some middle-income countries.

Instead, finance officials reiterated their "commitment to step up our efforts" to implement the framework in a "timely, orderly and coordinated manner" without any specifics.

Earlier, a source at the talks said China, by far the world's largest bilateral creditor, had baulked at the idea of accepting outright haircuts on debt.