Context:
Prime Minister is in Germany to attend the Group of Seven (G7) Summit at Schloss Elmau, a century-old retreat in a nature reserve in the Bavarian Alps.
Relevance:
GS II- International Relations
Dimensions of the Article:
- What is the G7?
- History of the G7
What is the G7?
- The Group of 7 (G7) is an informal group of seven countries — the United States, Canada, France, Germany, Italy, Japan and the United Kingdom, the heads of which hold an annual summit with European Union and other invitees.
- Unlike other bodies such as NATO, the G7 has no legal existence, permanent secretariat or official members.
- It also has no binding impact on policy and all decisions and commitments made at G7 meetings need to be ratified independently by governing bodies of member states.
- The major purpose of the G-7 is to discuss and deliberate on international economic issues.
- G7 is capable of setting the global agenda because decisions taken by these major economic powers have a real impact. Thus, decisions taken at the G7 are not legally binding, but exert strong political influence.
- It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.
Other details:
- As of 2022, G7 countries make up 10% of the world’s population, 31% of global GDP, and 21% of global carbon dioxide emissions, according to the Summit website.
- China and India, the two most populous countries with among the largest GDP figures in the world, are not part of the grouping.
- In all G7 countries, annual public sector expenditure exceeded revenue in 2021.
- Most G7 countries also had a high level of gross debt, especially Japan (263% of GDP), Italy (151%) and the US (133%).
- The G7 countries are important players in global trade.
- The US and Germany in particular are major export nations. Both sold goods worth well over a trillion US dollars abroad in 2021.
History of the G7
- A meeting between the current G7 members, excluding Canada, in 1975 laid the basis for the formation G7. At the time, the global economy was in a state of recession due to the OPEC oil embargo.
- As the energy crisis was escalating, the then US Treasury Secretary decided that it would be beneficial for the large players on the world stage to coordinate with each other on macroeconomic initiatives.
- After this first summit, the countries agreed to meet annually and a year later, Canada was invited into the group which marked the official formation of the G7 as we know it.
- The President of the European Commission was asked to join the meetings in 1977 and following the collapse of the Soviet Union in 1991 and a subsequent thaw in relations between the East and West, Russia was also invited to join the group in 1998. Thereafter the group was named the G8 until 2014, when Russia was expelled for its annexation of Crimea from Ukraine.
- The presidency of G7 meetings is held by each of the seven countries in turn, each year. The country holding the presidency is responsible for organising and hosting the meeting.
-Source: Indian Express
