G7 Leaders Pledge Action On Terrorism, Refugees, Slow Growth | Independent Newspapers Limited
Newsletter subscribe

Latest News

G7 Leaders Pledge Action On Terrorism, Refugees, Slow Growth

The G7 summit is taking place in Japan (AP)
Posted: May 27, 2016 at 10:43 am   /   by   /   comments (0)

The leaders of the Group of Seven rich economies ended a summit Friday by issuing an action plan for countering terrorism and other risks to peace and global growth, including the massive flows of refugees and migrants fleeing to Europe to escape conflict and poverty at home.

A sweeping declaration from the meeting at a scenic Japanese seaside resort addressed covered a universe of global and regional challenges, a breadth not matched by a depth of concrete measures.
The G-7 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 G-7 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 G-7 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,” 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,” Lagarde told reporters after the meeting ended. She said the IMF would help identify what countries could and should do to help counter slowing growth.
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. Lagarde was less alarmist, saying 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.