G7 leaders pledge action on terrorism, refugees and slow growth
SHIMA// The leaders of the Group of Seven richest economies ended a summit on Friday by issuing an action plan for countering terrorism and other risks to peace and global growth, including the flows of refugees to Europe to escape conflict and poverty at home.
The G7 leaders claimed a “special responsibility” for beefing up policies to stimulate and sustain growth of their sluggish economies. But their declaration glossed over disagreements over coordinating public spending policies to help perk up weak consumer spending and business investment, saying each country would take into account “country-specific circumstances”.
Germany, in particular, has balked at calls from other G7 members to commit to an expansionary fiscal policy.
“Weak demand and unaddressed structural problems are the key factors weighing on actual and potential growth,” they said in the declaration. “We remain committed to ensuring that growth is inclusive and job-rich, benefiting all segments of our societies.”
In a nod to concern over how to pay for such spending, especially in Japan where the public debt is more than twice the size of its economy, the communique includes a reference to the need to ensure debt is “on a sustainable path”.
The G7 host, Japanese prime minister Shinzo Abe said he had won support from his counterparts for his own “three arrows” economic strategy of ultra-loose monetary policy, public spending and longer-term reforms.
“We will be launching ‘Abenomics’ to the world,” Mr Abe said.
Christine Lagarde, head of the International Monetary Fund, said there was agreement on such a three-pronged approach.
“Many countries can do quite a lot and some more than they are currently doing,” she said after the meeting ended, adding the IMF would help identify what countries could and should do to help counter slowing growth.
Mr Abe appealed to his fellow leaders to act to avert another global crisis, comparing the current global economic situation to conditions just before the 2008 financial crisis.
Ms Lagarde was less alarmist and said the world was “no longer in a 2008 moment”.
“We are out of the crisis but we are suffering the legacy of the crisis,” she said, pointing to bad loans on the books of companies and banks as one of the biggest causes for concern.
The annual summit brought together the leaders of Britain, Canada, France, Germany, Italy, Japan and the United States.
Leaders of major international organisations and of a select group of developing countries attended “outreach” sessions held once the G7 summit meetings ended.
The G7 leaders denounced protectionism and trade barriers and noted the negative effect from overcapacity in some industries. One of the biggest headaches, Mr Abe said, was a glut in China’s steel industry.
“It’s a root cause distorting the market, and unless it’s fundamentally resolved, the problem persists,” he said.
During talks on the sidelines, the US, EU and Japan reiterated their determination to reach agreement on trade agreements meant to expand market access.
In their declaration, the summit leaders cited the possible departure of Britain from the European Union, depending on the outcome of a June 23 referendum, as one of many potential shocks for the global economy.
British prime minister David Cameron said staying in the EU was “all about Britain’s national interest”.
“It’s about Britain being big and bold,” he said.
The leaders also expressed concern over territorial tensions in the East and South China seas. The declaration did not mention China and its expansion into disputed areas specifically, but called for respecting freedom of navigation and of overflight and for resolving conflicts peacefully through law.
The summit declaration also highlighted joint efforts on corruption, cybercrimes, terrorism, global health and migration – which has become a huge headache especially for European nations – as other top priorities.
It said a global response was needed to cope with the surge in refugees, migrants and other displaced people to its highest level since the Second World War and committed to increasing assistance to meet their immediate and long-term needs.
But there were no specific, concrete offers of extra help.
* Associated Press
Updated: May 27, 2016 04:00 AM