Views: 33
At the present G7 annual summit this June, the European Commission President has underlined world-wide growth perspectives and that of the EU. We present our readers some of these growth aspects revealed by the “shadow” global governance and the Commission President…
Introduction: the G7 concept
The G-7 idea goes back to March 1973, when the US States Secretary convened an informal gathering of finance ministers from West Germany, France and the United Kingdom before an upcoming meeting in the US capital. The then US President Richard Nixon offered the White House as a venue, and the meeting was subsequently held in its Library on the ground floor; the original group of four consequently became known as the “Library Group”.
In mid-1973, at the Spring Meetings of the International Monetary Fund and the World Bank, the US State Secretary (G.Shultz) proposed the addition of Japan to the group: thus, the informal gathering of senior financial officials from the US, the UK. West Germany, Japan, and France became known as the “Group of Five”, which after joining Italy formed the “Group of Six” (G6).
This group assembled in France at Château de Rambouillet, to focus on several major economic issues, including the oil crisis, the collapse of the Bretton Woods system and the ongoing global recession. The result was the 15-point “Declaration of Rambouillet”, which, among other positions, announced the group’s united commitment to promoting free trade, multi-lateralism, cooperation with the developing world and rapprochement with the then Eastern Bloc. The members also established plans for future gatherings to take place regularly every year.
In 1976, Canada joined the group, which at the summit later that year became the first of the current Group of Seven (G7).
In 1977, the United Kingdom, which hosted that year’s summit, invited the then European Economic Community (EEC) to join all G7 summits; beginning in 1981; hence, the group was attended at every gathering by the Commission’s President, the President of the Council of Europe, as well as the leader of a country holding the rotating Presidency of the Council of the European Union. Since 2009, the then-newly established position of the President of the European Council, who serves as the Union’s principal foreign representative, also regularly attends the summits.
Following the 1994 summit in Naples, Russian officials held separate meetings with leaders of the G7; this informal arrangement was dubbed the “Political 8” (P8), colloquially the G7+1. At the invitation of the G7 leaders, Russian President B. Yeltsin was invited first as a guest observer, and later as a full participant. After the 1997 meeting, Russia was formally invited to the next meeting and formally joined the group in 1998, resulting in the Group of Eight or G8.
As the Wikipedia notes, Russia was an “outlier in the group”, as it “lacked the necessary GDP, the financial weight of other members, and at the time was not an established liberal democracy; thus, its invitation, made during a difficult transition to a post-communist economy, was believed to have been motivated by a desire to encourage its political and economic reforms and international engagement”. Russia’s membership was suspended in March 2014 in response to the Crimea crisis and the group members stopped short the country’s membership; in January 2017, Russia announced its permanent leave from the G8, and the group became again the G7.
Source: https://en.wikipedia.org/wiki/G7#History
The global outlook
Presently, the global economy is characterized by the following facts: the EU’s role in the EU’s partnership is growing: about 54% of foreign investment into Europe comes from G7 countries and 49% of Europe’s outward investment goes to G7, making it a powerful foundation for a fruitful cooperation.
Generally, the Commission President says, it is in the EU-G7 shared interest to keep trade among the countries involved both open and productive.
= To accomplish this, the group’s partners, first, have to “accommodate tariffs”: i.e. no matter who sets them, as they are ultimately represent tax paid by local consumers and businesses; that is, when companies face higher input costs, they pass them on through higher prices.
= Second, tariffs create uncertainty that disrupts business planning and investment: the CEOs often claim that uncertainty is what they struggle with the most – it makes it harder to innovate and grow.
– Third, and perhaps most importantly, when the group focuses its attention on tariffs between partners, it diverts the national/regional energy policy from the real challenge, which threatens all.
More in our analysis at: https://www.integrin.dk/2025/06/08/growth-in-europe-and-the-world-recent-assessments/
Besides, it is becoming clear that the current global trading system is not working as it should: i.e. “guardrails are clearly missing: on this point, the US President is right, the EU acknowledges, that there is a serious problem, although the EU president added, “we strongly feel that the biggest challenges are not the trade among the G7 partners, or rather – the sources of the biggest collective problem we have has its origins in the accession of China to the WTO in 2001”. China still defines itself as a developing country, which is not, actually: as “China has largely shown that it is unwilling to live within the constraints of the rules-based international system. While others opened their market China focused on undercutting intellectual property protections, massive subsidies with the aim to dominate global manufacturing and supply chains. This is not market competition – it is distortion with intent; and it undermines the G7 manufacturing sectors”.
European vision
The EU President noted that presently “Europe has strong economic fundamentals, inflation is currently returning below the ECB’s 2% target, allowing borrowing costs to fall, public debts and deficits are lower than in other major economies”.
She also made a vital remark: “the EU turns out almost as many STEM graduates per million inhabitants as the United States; Europe’s share in global patent grants is close to other global players, and the EU has had enough financial resources to finance them, with households saving around €1.3 trillion every year”.
The EU has also has had an opportunity to bring down energy prices “in a lasting way” and the process to shift to secure, low-cost clean energy sources is on track: thus, by 2030, over 40% of the EU energy consumption will come from clean sources; the EU has become the “top trading partner for over 70 global nations and the EU continues to strike new agreements”.
According to the Commission President, the EU has, first, to crate “an easier place for innovative companies to grow”; i.e. it means that “despite the savings, the entrepreneurs lack access to risk capital, because capital markets are still too fragmented”.
Second, the EU-27 has to be “a better place to invest: presently, two out of three EU companies say that regulation is a key obstacle to investment; thus, firms still face long permitting procedures, onerous reporting requirements and diverging enforcement of digital rules”.
Third, the EU member states have “to make doing business cheaper, especially in terms of energy costs”. To achieve this, the EU needs “massive investment in grids and storage and smarter market design; besides, the EU needs “faster permitting and longer-term contracts”. On top of all these, the EU has to developed a “new urgency mindset to address the challenges”.
Source and citations from: https://ec.europa.eu/commission/presscorner/detail/da/statement_25_1521
G7 concluding remarks
However noted the G7 participants, there are some problems to be solved together: i.e. the G7 economies account for 45% of global GDP and over 80% of intellectual property revenues; this is a vital leverage to be used by all members.
Hence, acknowledged the group, it is necessary to use this opportunity together, noted participants: “let us channel it to build resilient supply chains” in order to strengthen the G7 technological and industrial leadership, to reform the rules of global trade – so they reflect today’s economic realities.
The Commission President reiterated the intention to “working closely with the US towards a mutually beneficial trade agreement, the one that reflects the strengths of our economies, supports our firms, workers and consumers”.
She also promised in the next G7 session to expand on how to “align national strategies in such areas as: reducing dependencies, strengthen resilience and protect industrial background in a volatile world”.
= G7 critical minerals action plan
The leaders of the G7 recognize that critical minerals are the building blocks of digital and energy secure economies of the future; hence, they remain committed to transparency, diversification, security, sustainable mining practices, trustworthiness and reliability as essential principles for resilient critical minerals supply chains, as well as acknowledging the importance of traceability, trade and decent work contributing to group’s economic prosperity and that of its partners.
The leaders have shared national and economic security interests, which depend on access to resilient critical minerals supply chains governed by market principles. The leaders recognized that non-market policies and practices in the critical minerals sector threaten nations’ ability to acquire many critical minerals, including the rare earth elements needed for magnets, which are vital for industrial production. Recognizing this threat to the G7 economies, as well as various other risks to the resilience of critical minerals supply chains, the leaders intend to work together and with partners beyond the G7 to swiftly protect economic and national security: this will include anticipating critical minerals shortages, coordinating responses to deliberate market disruption, diversifying and on-shoring, where possible, mining, processing, manufacturing and recycling.
The leaders have launched a G7 Critical Minerals Action Plan, building on the Five-Point Plan for Critical Minerals Security established during Japan’s G7 Presidency in 2023 and advanced by Italy in 2024. The Action Plan will focus on diversifying the responsible production and supply of critical minerals, encouraging investments in critical mineral projects and local value creation, as well as promoting innovation.
Source and citation from: https://ec.europa.eu/commission/presscorner/detail/da/statement_25_1552
= The G7 leaders expressed their commitments to action in the following critical materials areas:
= Building standards-based markets. The leaders recognized that critical minerals markets should reflect the real costs of responsible extraction, processing and trade of critical minerals, while ensuring labor standards, local consultation, anti-bribery and corruption measures and addressing negative externalities, including pollution and land degradation.
The G7 states will develop a roadmap to promote standards-based markets for critical minerals, in collaboration with industry, international organizations, resource producing nations, Indigenous Peoples, local communities, unions, and civil society. The roadmap will establish a set of criteria that constitute a minimum threshold for standards-based markets, strengthening traceability as a necessary measure; as part of these efforts, the G7 will evaluate potential market impacts.
Besides, the G7 will task relevant ministers to produce this roadmap, setting out milestones to be met in fulfilling this commitment, before the end of the year.
= Mobilizing capital and investing in partnerships. The leaders recognized the need to work together to increase investment in responsible critical minerals projects within the G7 and around the world. Immediate and scaled investment is required to secure future supply chains and ensure promising mining and processing projects overcome barriers such as delays in permitting and approval processes, market manipulation, and price volatility.
= Promoting innovation. The leaders envisaged rich public and private innovation ecosystems with untapped potential to address strategic technology and processing gaps essential to bringing critical minerals to market. They will intensify collaboration to fill targeted innovation gaps in critical minerals research and development, with a focus on processing, licensing, recycling, substitution, redesign and circular economy; they will also work with partner organizations to showcase new technologies and production processes.
= G7 leaders statement on AI prosperity. The leaders have recognized the potential of a human-centric approach to artificial intelligence (AI) to grow prosperity, benefit societies and address pressing global challenges. To realize this potential, the states must better drive innovation and adoption of secure, responsible and trustworthy AI that benefits people, mitigates negative externalities and promotes national security. The states will power AI now and into the future to work with emerging market and developing country partners to close digital divides, in line with the United Nations Global Digital Compact.
The leaders wanted to seize the potential of AI in the public sectors to drive efficiency and better serve the public; they also recognized that SMEs, including micro-enterprises, are the backbone of national economies, driving growth and creating jobs. Thus, in 2024, the G7 committed to work together to help SMEs adopt and develop new technologies, including AI, to accelerate broad-based growth.
The leaders are also committed to fully leverage the potential of AI to enable decent work while addressing challenges for the labor markets.
The leaders also reiterate the importance of operationalizing Data Free Flow with Trust (DFFT) through trustworthy, cross-border data flows and affirm its value in enabling trusted AI development and use.
Finally, the leaders recognized the transformative impact of AI for the cultural and creative sectors, including challenges to business models and job security, as well as opportunities to boost innovation.