What Is the Group of Seven (G-7)?

What Is the Group of Seven (G-7)?

Let me explain what the Group of Seven (G-7) is: it's an intergovernmental organization composed of the world's largest developed economies, including France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. The government leaders from these countries gather periodically to tackle international economic and monetary issues, with the presidency rotating among members.

For a time, it was called the Group of Eight (G-8), but that changed in 2014 when Russia was ousted after illegally annexing Crimea from Ukraine. The European Union acts as a sort of de-facto eighth member, enjoying full rights and responsibilities except for hosting or chairing meetings.

How the Group of Seven (G-7) Works

The main goal of the G-7 is to discuss and sometimes coordinate actions to solve global problems, especially those related to economics. Since starting in the early 1970s, the group has covered topics like financial crises, monetary systems, and major world events such as oil shortages.

The G-7 has initiated programs to fund solutions and ease crises where collective effort makes sense, including multiple efforts for debt relief in developing nations. In 1996, collaborating with the World Bank, the G-7 started an initiative for the 42 heavily indebted poor countries (HIPC), followed by the Multilateral Debt Relief Initiative (MDRI) in 2005, which pledged to cancel debts for countries completing the MDRI program.

Consider this: in 1997, the G-7 provided $300 million to help contain the reactor meltdown at Chernobyl. Then, in 1999, the group stepped up by creating the Financial Stability Forum (FSB) to manage the international monetary system more directly, involving key national financial authorities like finance ministers, central bankers, and international bodies.

History of the Group of Seven (G-7)

The G-7's roots go back to the early 1970s, when leaders from the U.S., U.K., France, West Germany, and Japan met informally in Paris to talk about the recession and oil crisis at the time. This led French President Valéry Giscard d’Estaing to invite those leaders plus Italy to Rambouillet in 1975 for more discussions on global oil, including both leaders and finance ministers—a format that stuck. Canada joined the next year.

The host of the G7 summit, or presidency, rotates every year in this order: France, United States, United Kingdom, Germany, Japan, Italy, and Canada.

The group expanded to the G-8 when the Soviet Union moved toward freer markets and held its first direct presidential election in 1991. After the 1994 G-7 meeting in Naples, President Boris Yeltsin met with G-7 members, forming the P-8 (Political 8). By 1998, urged by leaders like U.S. President Bill Clinton, Russia became a full member, making it the G-8.

But the G-8 didn't last long. In 2014, Russia got suspended after annexing Crimea and amid tensions in Ukraine. As of 2021, Russia hasn't been invited back to the G-7.

The Group of Seven (G-7) vs. the Group of 20 (G-20)

As developing nations grew to represent more of the global economy, the lack of a forum including those emerging economies became obvious. That's why the Group of 20 (G-20) was formed in 1999, including all G-7 members plus 12 more countries and the EU.

With the rising economies and trade of places like China, Brazil, India, Mexico, and South Africa—all in the G-20—many now view the G-20 as taking over much of the influence and role that the G-7 once held.

2021 G7 Summit

The G7 met from June 11 to June 13, 2021, in Cornwall, England. Based on the group's statements, discussions centered on the ongoing coronavirus pandemic and the climate crisis. They committed to distributing 1 billion vaccine doses over the next 12 months.

On the climate front, the G7 pledged to achieve net-zero carbon emissions by 2050, limit global temperature increases to 1.5 degrees, boost and improve climate finance, and conserve at least 30% of land and oceans by 2030.