G7 summit ends with a vow to boost world economy

RSTV Bureau
Shima: Japanese Prime Minister Shinzo Abe, foreground centre left, and U.S. President Barack Obama, foreground centre right, smile at photographers with other leaders of Group of Seven nations, clockwise from left, French President Francois Hollande, British Prime Minister David Cameron, Canadian Prime Minister Justin Trudeau, European Commission President Jean-Claude Juncker, European Council President Donald Tusk, Italian Prime Minister Matteo Renzi and German Chancellor Angela Merkel, at the start of the second working session of the G-7 summit meetings in Shima, Mie Prefecture, Japan, Thursday, May 26, 2016. Photo: AP/PTI

Shima: Japanese Prime Minister Shinzo Abe, U.S. President Barack Obama, French President Francois Hollande, British Prime Minister David Cameron, Canadian Prime Minister Justin Trudeau, European Commission President Jean-Claude Juncker, European Council President Donald Tusk, Italian Prime Minister Matteo Renzi and German Chancellor Angela Merkel pose for a photograph at the start of the second working session of the G-7 summit meeting in Shima, Mie Prefecture, Japan, Thursday, May 26, 2016.
Photo: AP/PTI

The two day G7-2016 summit being held in Ise-Shima, Japan comes to an end on Friday. The summit saw various sessions spanning range of topics which included Global Economy & Trade, Foreign Policy, Climate Change & Energy, Development, Quality Infrastructure Investment, Health and Women.

Raising concern about the shape of global economy, the Group of Seven leaders today said that pumping up the world economy was an “urgent priority”, but left the door open for a go-your-own-way approach in a sign of lingering divisions over how to boost growth.

Going into a two-day summit, the club of rich nations was working to find common ground as host Japan looked to win backing for its view that government spending was key to lighting a fire under the world economy, while Germany instead emphasised economic reforms.

As they wrapped up the talks today, the group said they all agreed on the need to hammer out a workable plan that took into account the circumstances facing each member — also including the United States, Britain, France, Italy and Canada.

“Global growth is our urgent priority,” the G7 said in a final communique, adding that growth remained “moderate and below potential”.

“Taking into account country-specific circumstances, we commit to strengthening our economic policy responses in a cooperative manner and to employing a more forceful and balanced policy mix, in order to swiftly achieve a strong, sustainable and balanced growth pattern”, it said.

It added: “We reiterate our commitments to using all policy tools — monetary, fiscal and structural — individually and collectively, to strengthen global demand and address supply constraints, while continuing our efforts to put debt on a sustainable path.”

The group also said it would stand by earlier pledges to stay committed to “mutually-reinforcing fiscal, monetary and structural policies”.

Lesbos: Volunteers help migrants and refugees on a dingy as they arrive on the shore of the northeastern Greek island of Lesbos, after crossing the Aegean sea from Turkey on Sunday, March 20, 2016. Photo: AP/PTI

Lesbos: Volunteers help migrants and refugees on a dingy as they arrive on the shore of the northeastern Greek island of Lesbos, after crossing the Aegean sea from Turkey on Sunday, March 20, 2016.
Photo: AP/PTI

In another session, the G7 leaders mulled over the refugee crisis gripping Europe and said that it is a problem that the whole world must deal with.

“The G7 recognises the ongoing large scale movements of migrants and refugees as a global challenge which requires a global response,” they said in a statement.

Last year, some 1.3 million refugees, mostly from conflict-ridden Syria and Iraq, asked for asylum in the European Union — more than a third of them in Germany.

“We commit to increase global assistance to meet immediate and long-term needs of refugees and other displaced persons as well as their host communities . . . . The G7 encourages international financial institutions and bilateral donors to bolster their financial and technical assistance”, they said.

The G7 leaders also took up the concern over the possibility of so-called “Brexit”, as British voters prepare for a June 23 referendum to decide whether to leave the 28- country bloc — European Union. At the close of the summit in Japan, the G7 leaders warned that a British secession from the EU in next month’s referendum could have disastrous economic consequences.

The grouping is the latest to sound the alarm over the possibly far-reaching dangers of one of the continent’s largest economies opting to go all alone, although they were careful to stress that the decision was up to the people of Britain.

“A UK exit from the EU would reverse the trend towards greater global trade and investment, and the jobs they create, and is a further serious risk to growth,” they said in a declaration after talks largely focused on kickstarting the world economy.

“This summit is sending the signal that all of us hope that Great Britain remains a member of the European Union,” German Chancellor Angela Merkel said, after meeting with her counterparts from Britain, Canada, France, Italy, Japan, and the United States.

“But of course the decision has to be made by the British voters,” she added.

UK-Parliament,-Westminster,-London-United-Kindgom

On June 23, voters in the UK will decide in a referendum whether to leave the 28- country bloc — European Union.

UK Prime Minister David Cameron has been campaigning for Britain to stay in, with recent polls suggesting a widening lead for supporters of continued EU membership.

However, the “leave” campaign is putting up stiff competition, with a number of high-profile supporters, including former London mayor Boris Johnson.

They have sought to tap into discontent over what is popularly seen as the EU’s tendency to overreach, which many in the island nation see as a threat to its distinct identity.

However, opponents of Brexit say a vote to leave the EU would spark political and economic turmoil for the region, which could spread to other parts of the world.

They warn global selloffs and violent currency fluctuations could follow.

They say the reduction in inward migration that the “out” camp wants would leave Britain short of plumbers, builders, mechanics and waiters, crimping the economy.

It would also force white collar jobs from London, with bankers and lawyers decamping to rival financial capitals such as Frankfurt or Paris.

The International Monetary Fund has warned of a potentially severe global market reaction to a “Leave” vote, while G7 finance ministers at a meeting earlier this month warned of the prospect of a global “shock”.

The Group of Seven includes, along with the European Union: Canada, France, Germany, Italy, Japan, UK and US to discuss international economic and political issues.