The Group of Seven (G7) summit in Japan ended with an unhappy compromise that papered over the economic differences between those led by Japan, which has threatened to intervene to block sharp yen rises, and others led by the United States, which opposes market intervention, and Germany, which is deeply sceptical about using public spending to boost growth. The seven leading industrial nations all agreed to pledge to seek strong global growth, but without a proper agreement on a unified way forward. Their differing views on currencies and stimulus policies will cause further uncertainly in the global financial markets.
The seven leaders were reduced to agreeing to “a more forceful and balanced policy mix” to support growth, while they were forced to recognise that each country has different circumstances. Host Prime Minister Shinzo Abe was the most outspoken about the dangers to global economy, which he likened to the global financial crisis that followed the 2008 Lehman Brothers’ bankruptcy, and warned against a disastrous contraction of the global economy.
However, the seven nations did find common cause in the political arena, uniting to express their concern over the actions of North Korea’s nuclear tests and missile launches, Russia’s annexation of Crimea, over which they agreed to continue sanctions, and China’s assertiveness in the East and South China Seas, where the country has territorial disputes with Japan and several Southeast Asian nations. The G7 called for peaceful settlement of maritime disputes and for all nations to respect the freedom of navigation and overflight in international waters. And even though the G7 did not mention China by name, the G7 statement that all countries should refrain from “unilateral actions, which could increase tensions”, attracted an extremely sharp response from China, which said that it was “extremely dissatisfied with what Japan and the G7 have done”, with a further comment that “China is resolutely opposed to individual countries hyping up the South China Sea for personal gain”.
A plea from Donald Tusk, the European Union President, did not get very far, despite his urging that the G7 should take the lead in managing this crisis. He referred to the flow of refugees from Syria and elsewhere to Europe that has given the continent its biggest refugee crisis since the Second World War, but the communique did not offer anything specific and restricted itself to observing that the migrant crisis in Europe was “a global challenge, which requires a global response”.
