Opinion: No stimulus, but G7 talks in Japan bear fruit

Deutsche Welle
4 Min Read

Though risks to the global economy are growing, national leaders at the G7 summit did not manage to reach an agreement on a stimulus program. Nonetheless, the meeting in Japan was important, DW’s Christoph Kober writes.
They have set high expectations. The Group of Seven major industrial countries has pledged “to collectively tackle current economic challenges while laying out foundations for stronger long-term global growth.” That was in the weighty final statement after G7 talks in Japan.

The vague formulations go on. The goal is to be achieved with a “forceful mix” of fiscal and financial policies and structural reforms, which means more spending, printing more money, more austerity – everyone can do what they believe is right. It is understandable when people ask what the common policies are.

Host Shinzo Abe, who faces domestic pressures, smilingly announced that “Abenomics will be deployed throughout the world.” Economists coined the term for the Japanese prime minister’s mix of debt-financed stimulus packages, flooding the market with money and vows to reform politically.

German Chancellor Angela Merkel probably does not share this view, and the same applies to the other G7 representatives. None of the summit participants subscribe to Abe’s assessment of the current situation as being reminiscent of the post-Lehman Brothers meltdown. The summit in Ise-Shima showed just how far apart from each other the G7 countries stand with regard to the main issue: the economy.

Trust is evolving

Initiated over 30 years ago as an informal platform for the exchange of ideas, the meetings of the leading industrialized nations still serve a purpose. First of all, they are forums where decision-makers meet. The value of the evolved structures is much appreciated in times of crisis, but also in other situations, for example, when such newcomers as Canadian Prime Minister Justin Trudeau step into the international political arena.

The summit has shown that G7 states bond through a common stance on many international issues. Even though China was not explicitly mentioned in the communique, G7 leaders have made it clear that they share a common line no matter what the issue – be it geostrategic disputes involving China and its maritime borders or the distortive market effects of Beijing’s subsidies in the already ailing steel sector. Other essential mutual points are a clear position on Russia’s perceived interference in Ukraine’s civil war and North Korea’s missile testing. The G7 has declared a commitment to world trade and more cooperation as regards refugees.

Many of the great words and mutual values must now be brought to life through actions and money. For example, the G7 has pledged $3 billion dollars (2.7 billion euros) in financial support to Iraq. And, for the first time, the group has spoken up for universal access to health care for everyone in the world – it’s just that money is lacking. Maybe the funds can be raised by the next summit in Sicily.

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