The G7 is a discussion group created in the 1970s and characterised by that fact that it does not have a legal status or a permanent secretariat. It offers a forum for dialogue and coordination among its members.
In the early 1970s, at the initiative of the United States, the finance ministers of the United States, Germany, France, the United Kingdom and Japan decided to meet informally to contend with the first oil shock and the crisis of the international monetary system following the collapse of Bretton Woods. The first summit of Heads of State was held in France in 1975 in Rambouillet, together with Italy. Then, when Canada joined in 1976, the group became the "G7", and the seven Heads of State met for the first time in June 1976 in San Juan, in the United States. The meetings of the finance ministers and central bank governors became an established finance function where they would prepare the discussions of Heads of State on economic and financial issues. After the fall of the USSR, the G7 invited Russia to join in 1997 and became the G8 (the latter only participating in some meetings), but Russia’s membership was suspended due to its unilateral annexation of Crimea.
With the Plaza Accord in 1985 and the Louvre Accord in 1987, the G7 became a forum for consultation prior to coordinated central bank interventions in foreign exchange markets. The G7 has reaffirmed its commitment to market-determined exchange rates, as evidenced by communiqués adopted following its summits.
The G7’s scope of action has gradually broadened to include new areas such as the fight against terrorism, labour, health, agriculture, security, and climate change. For example, in 1989 the G7 created the Financial Action Task Force (FATF), which aims to combat money laundering and terrorist financing. The G7 has been active in the area of development, for example, with the decision in 2005 to cancel debts owed to three multilateral institutions by countries that were reaching or would reach the completion point under the enhanced Heavily Indebted Poor Countries Initiative (HIPC Initiative) jointly led by the IMF and the World Bank. The G7 also considered climate change at an early stage, recognising at the Tokyo Summit in 1979 the need to develop alternative energies to combat atmospheric pollution. Finally, it has played an important role in resolving political crises.
Since the creation of the G20, the G7 has adapted its functioning without abandoning its initial vocation of dialogue and coordination in small committees. The G7 sometimes deals with certain themes that are common to the G20 but to which it takes a different approach. It can also sometimes act as an antechamber for the discussion of new topics, later extended to the G20. For example, the topic of crypto-assets was discussed in the G7 before being proposed for discussion in the G20 upon a Franco-German initiative in February 2018.
Updated on: 03/19/2019 15:26