The Group of Seven (G7) countries and the European Union should impose an embargo on Russian energy, as well as help Ukraine close its budget deficit amid Russia's full-scale invasion of our territory. This was stated by adviser to the President of Ukraine on economic issues Oleh Ustenko in an interview with The New Yorker.
In particular, he said that even after US President Joseph Biden called genocide what the Russian army is doing in Ukraine, European allies are dragging their feet about an energy embargo on Russia.
"We are saying, Look, guys… You are stopping caviar exports. However, what can really harm this Russian military machine is oil. And nothing has happened with oil. We just had talks and talks and talks, and then nothing happened," Ustenko said.
According to him, some European countries are, in fact, buying more gas and oil than they were before the war. However, he suggested that some countries may have been trying to build up their energy reserves in anticipation of an embargo that they think is coming.
The adviser to the President of Ukraine acknowledged that Germany and France, the EU's two largest economies, had reduced their imports of Russian oil and gas since the war began, but noted that they are still buying large amounts.
According to Ustenko, Washington should exert more pressure on its European allies to join an energy embargo.
He also called on the United States and other members of G7 to provide more financial support for the Ukrainian government as it tries to pay for the war and maintain social spending for its population.
"The contraction in our economy is huge," the adviser to the President of Ukraine said. "Fifty per cent of our businesses are not fully operational. Our budget revenues have fallen substantially, and our budget deficit has increased. This deficit has to be financed."
Ustenko estimated the budget deficit at about $8 billion a month. According to him, With Ukraine effectively shut out of the international financial markets, he said, it can't issue more debt to cover this amount. If the G7 provided fifty billion dollars in new financing, that would resolve the deficit issue for at least another six months, he said.
"We need extra financial support, including from the United States. Of course, the United States was very kind, providing us with weapons. But it is not enough," the adviser to the President of Ukraine said.
However, Ustenko said that the first priority must be the immediate imposition of an energy embargo, because that is where Russia is most vulnerable. In this case, in his opinion, the moral argument should be at least as compelling as the economic one.
"If somebody is committing a war crime and a third party is giving money to the war criminal, then, for us in Ukraine, this third party is also in the cycle of committing the same war crime. Because the third party, with his money, is in the position of supporting the war crime," the President's adviser said.