Global economy is ‘urgent priority’: G7

L-R: Sri Lankan President Maithripala Sirisena, French President Francois Hollande and United Nations Secretary-General Ban Ki-moon (R) chat at they gathered for the “family photo” with “Outreach Partners” and world leaders at the G7 Summit in Shima yesterday


AFP - Pumping up the world economy is an “urgent priority” G7 leaders said yesterday, as they warned there could be dire global consequences if Britain decides to leave the EU.

The Group of Seven industrial powers cautioned that the worldwide economy was patchy and faced unwelcome headwinds, but disputes erupted over how bad things actually are and the best course of action.
Wrapping up their meeting in rural Japan, the leaders endorsed a pick-and-mix approach to dealing with the malaise that has lingered since the financial crisis erupted in 2008.

“Global growth is our urgent priority,” the G7 said in a final statement. “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.” The strained consensus reflects behind-the-scenes clashes within the grouping of rich nations.
Prime Minister Shinzo Abe argued that the global economy faced the risk of a “crisis”, and drew comparisons with the mood when Japan last hosted the exclusive club, in 2008 just months ahead of the collapse of Lehman Brothers.

“To that, one leader questioned whether the degree of the current situation was negative enough to use the term ‘crisis’,” a senior Japanese official said. That leader was Angela Merkel, the Asahi Shimbun newspaper said Friday, who was backed by International Monetary Fund chief Christine Lagarde, according to Bloomberg News.

At his post-summit press conference, however, Abe put a different gloss on it. “We shared a strong sense of crisis,” he told reporters of his discussions with fellow leaders.

Some observers, however, said the high-profile meeting didn’t deliver much.
“We know there are different views on fiscal policy but the statement simply concludes that fiscal policy should be implemented ‘flexibly’ in order to ‘promote growth’,” said Andrew Kenningham, Senior Global Economist at research house Capital Economics.”

Leaders were unequivocal though on their attitude to one of the risks facing the global economy, and came out firmly against the prospect of a so-called “Brexit”.
“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 two days of talks.
British Prime Minister David Cameron, who has campaigned for his nation to remain in the 28-country bloc, seized on the unified G7 position. “The communique is very clear about the economic dangers and economic risks” of Brexit, he told a press conference. The grouping -- the United States, Germany, Japan, Britain, Italy, France and Canada -- found easy common ground on the hot-button issue of refugees, agreeing it was a worldwide problem. “The G7 recognises the ongoing large scale movements of migrants and refugees as a global challenge which requires a global response,” the leaders 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,” they said.
“The G7 encourages international financial institutions and bilateral donors to bolster their financial and technical assistance.”

Merkel told reporters the G7 had decided to dedicate its attention this year “especially to Iraq” -- one of the chief sources of the tide of migrants fleeing conflict and seeking refuge in Europe.

China -- which is not a member of the G7 and was not at the two-day summit in Ise Shima, 300 kilometres (200 miles) southwest of Tokyo -- made its expected cameo appearance in the final statement. Although it was not mentioned by name, there was no room for doubt that Beijing was in the crosshairs when leaders expressed unanimous disquiet about tensions in the Asia-Pacific. “We are concerned about the situation in the East and South China Seas, and emphasise the fundamental importance of peaceful management and settlement of disputes,” they said.

Tensions have risen over competing claims in the South China Sea, a strategic body of water that encompasses key global shipping lanes and which is claimed nearly in its entirety by China. Beijing’s claims and ongoing militarisation of islets and reefs there has angered some of its Southeast Asian neighbours, including the Philippines and Vietnam.China is also locked in a dispute with G7 host Japan over rocky outcrops in the East China Sea, stoking broader concerns about the country’s growing regional might and threats to back up its claims with force, if necessary.


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