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In focus - International Cooperation

World Economic Summit

Introduction

Buttons with different flags symbolize the World Economic Summit; Source: istockphoto.com/studiocasper

© istockphoto.com/studiocasper

In 1975, the world's leading economic and political powers - the United States, Japan, Germany, France, Italy, the United Kingdom and Canada - joined together for the first time in an informal forum known as the Group of 7, in order to take up their responsibility for key global issues and actively contribute towards the development of constructive responses. From 1998 to 2014, the G7 held meetings together with Russia in a 'group of eight', or G8. In response to Russia's annexation of Crimea, which violated international law, the G7 states declared on the margins of the Nuclear Security Summit at The Hague on 24 March 2014 that they would suspend their participation in the G8 format until an appropriate political environment was in place.

In view of the financial and economic crisis, a further group of 20 leading economic and political powers (including the EU as a single member) was formed in 2008 to draw up a common plan to resolve the pressing global problems which had been created by the crisis. Since then, the G20 has emerged as the leading format for intergovernmental cooperation in the field of financial and economic policy, whilst the G7 has increasingly focused on foreign, security and development policy issues.

The G7 leaders meet once a year upon invitation of the respective presidents. The European Commission is represented and has observer status.

The group adopts a summit declaration (Communiqué) at each meeting which gathers together the most important results. The topics of the summit are set by chief negotiators of the governments, also known as 'sherpas'. The sherpa of Germany (personal representative of the Federal Chancellor for the G7/G20) is Prof. Lars Hendrik Röller, the Federal Chancellor's economic and financial policy adviser. The sous-sherpas from the Federal Foreign Office and the Federal Ministry of Finance, which also meet regularly at G7 level, work together closely with the sherpas in order to support them in their work.

Issues of global importance are discussed amongst the countries based on consensus and are implemented in the group of the leading industrial countries. The classic G7 topics are world economy and trade, foreign, security and development policies, as well as climate change, environment and energy. In 2014, the G7 states produced about 35% of global GDP (measured in purchasing power parity); they account for roughly half of global trade, provide three-quarters of the world's development aid, and are the largest contributors to the finances of the international organisations. Furthermore, the United States, the United Kingdom and France are three of the five permanent members of the UN Security Council.

In addition to the meetings of the heads of state and government, the foreign ministers meet each year in the run-up to the summit in order to address current foreign and security policy challenges. The G7 finance ministers and central bank governors also meet regularly to discuss monetary policy issues. Depending on the agenda set by the respective presidency, there are also meetings between other government ministers from the G7.

The G7 countries have a special responsibility for shaping our planet's future. This means that the G7 sees itself as a community of values for peace and security that supports people in leading a self-determined life. Freedom and human rights, democracy and the rule of law, peace and security, prosperity and sustainable development - all of these are key principles of the G7.

Japanese presidency of the G7 in 2016

The G7 heads of state and government met under Japanese presidency in Ise-Shima from the 26 to 27 May. Apart from the classic G7 topics, the focus of the meeting was on infrastructure, women's rights and health, and ways to deal with the migrant crisis. Further information can also be found in the final statement (PDF: 239 KB).

The Federal Ministry for Economic Affairs and Energy participated heavily in discussions on trade and energy. In trade policy, the G7 stressed their commitment to open markets and campaigning against protectionism. The group emphasized that excess capacities in the industrial sectors could be resolved by reducing market-distorting measures. It also underlined the importance of having a rules-based multilateral trading system in the World Trade Organization as well as regional and bilateral agreements. The G7 showed its commitment to driving forward both decarbonisation efforts as well as investments in renewable energy and energy efficient infrastructure. The group reiterated its commitment to the measures in energy supply security that were decided upon at the G7 Summit in Elmau in 2015 and its obligation to reduce inefficient subsidies for fossil fuels.

In the run-up to the summit, Japan invited G7 countries to ten Ministerials. The Federal Ministry for Economic Affairs and Energy was represented at the Energy Ministerial in Kitakyushu by State Secretary Baake on 1 and 2 May 2016 and at the ICT Ministerial in Takamatsu by State Secretary Machnig on 29 and 30 April 2016. This was the first ICT Ministerial of the G7 since 1995, and focused on international challenges in the areas of ICT and digitisation.

Italy will hold the G7 presidency in 2017.

German G7 presidency 2015 - Energy Ministerial in Hamburg

Germany held the G7 presidency in 2015. The results were gathered together in a final statement (PDF: 5,8 MB).

The G7 Energy Ministerial in Hamburg was led by Federal Minister Sigmar Gabriel on 11 and 12 May 2015. The focus of the meetings was on securing a sustainable energy supply. As host, the German G7 presidency showed that a sustainable and secure energy supply is beneficial for innovation, economy and technological progress. In the previous meeting in 2014, the G7 Energy Ministers had already agreed on measures to improve energy security (in particular that of the gas supply) under the G7 Rome Energy Initiative. The G7 presidency continued to develop this dialogue on energy security. The focus here was on the question of how competitiveness can be made compatible with climate protection when it comes to energy supply. The emphasis was on energy efficiency, innovative technologies like offshore wind energy, and the supply security of electricity systems with a high proportion of renewables. The two-day Energy Ministerial resulted in a joint Communiqué by the G7 energy ministers (PDF: 152 KB).

Further information

The 'Group of 20', or the G20, is an informal forum made up of the heads of state and government from the United States, Japan, China, Germany, France, Italy, the United Kingdom, the EU, Brazil, Canada, India, Russia, Australia, Mexico, Korea, Turkey, Indonesia, Saudi Arabia, Argentina and South Africa. The presidency is responsible for all of the organisation of the summit and also determines the agenda. This year (2016), the G20 presidency is being held by China.

The group's aim is to strengthen the international financial system and to develop solutions to global challenges. The following international organisations are regularly involved in the summits and work of the G20: International Monetary Fund (IMF), World Bank (WB), Financial Stability Board (FSB), Organisation for Economic Co-operation and Development (OECD), World Trade Organization (WTO), International Labour Organization (ILO) and United Nations (UN).

Germany’s 2017 G20 presidency

The G20 presidency is responsible for all of the organisation of the summit and also sets the agenda. Germany took over the G20 Presidency on 1 December 2016. Within its context, a Digital Ministers' Meeting will be held in April 2017. In the run-up to the meeting of the G20 Digital Ministers, the OECD joined with the Federal Ministry for Economic Affairs and Energy (BMWi) to host a conference entitled ‘Key Issues for Digital Transformation in the G20’ in Berlin on 12 January 2017. The primary outcomes from the conference will be fed into the G20 Digital Ministers’ meeting. The G20 summit will take place in Hamburg on 7-8 July 2017.

Germany will build upon the achievements of previous presidencies to ensure continuity of the work undertaken by the G20. Only if the measures adopted are implemented and if compliance with them is monitored will the G20 be able to achieve lasting progress. Germany will also be adding new topics to the G20 agenda. The aim is to use collective action to limit economic, social, environmental and political risks and to ensure growth that is strong, sustainable, balanced and inclusive.
The agenda will focus on three key objectives: ensuring stability, becoming better-prepared for the future, and assuming responsibility.

G20 priorities for the Federal Ministry for Economic Affairs and Energy
Key topics for the Federal Ministry for Economic Affairs and Energy are digitalisation, energy, trade and investments.

Digitalisation

Digitisation offers major opportunities for business and society. If we want to make full use of these opportunities, we need a joint, international framework for action. Digitalisation is driving globalisation by means of social networks, digital commerce and digital platforms. In an economy that is increasingly driven by platforms, we need common rules and standards that apply around the globe – from technical standards, to grid expansion, through to competition and regulatory issues. This is why the Federal Ministry for Economic Affairs and Energy has taken the initiative to host the first ever G20 Digital Ministers' Meeting in April 2017 that will focus on ‘Digitalisation: Policies for a digital future'.

Energy

A secure, economically viable and climate-neutral energy supply that is accessible to all people is the fundamental basis for economic growth and prosperity and one of the central concerns of the G20. Under the Chinese presidency, the G20 countries agreed an ambitious agenda for the implementation of the Paris Climate Agreement. This will only prove possible if energy and climate policy are closely interlinked and designed to work together. The energy sector accounts for a significant share of all CO2 emissions. Under the German presidency, discussions will be held on how ambitious energy reforms can be launched in the G20 countries and beyond to build energy systems that are secure, economically efficient and climate-friendly, and on what type of investment is needed for this.

Trade and Investment

Trade and investment are key drivers of growth. The work of the Trade and Investment Working Group under the German presidency will therefore also focus on supporting the multilateral trading system. The goal is to build open markets, a reliable policy environment and transparency in order to promote cross-border investment and growth. The work of the G20 is to be deepened with a view to facilitating and maintaining investment. A further priority will be placed on the field of digital trade, with an emphasis on the improvement of statistical data, on the role of the WTO, and on the development dimension. In addition, high standards of protection for labour will be on the agenda.

2016 G20 summit

The 2016 G20 summit under the Chinese presidency took place in the eastern Chinese city of Hangzhou on 4-5 September. It was entitled: “Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy”. The Federal Ministry for Economic Affairs and Energy played a leading part during discussions on trade and investment, digital economy, the new industrial revolution and innovation and energy. The official Communiqué of the summit can be found here (PDF: 345 KB).

Importance of the G20

The G20 has developed into the leading format for intergovernmental cooperation in the fields of fiscal and economic policy. Thanks to its wide membership, the group is capable of actively driving forward efforts to develop solutions to global problems and of adopting global measures. The G20 countries represent approx. two-thirds of the world’s population, account for around four-fifths of the world’s GDP (in purchasing power parity) and of world trade, and provide three-quarters of the world’s development aid.

The G20 has been meeting at the level of finance ministers and central bank governors since 1998. The original aim of this institutionalised dialogue was to foster international financial stability following the Asia crisis of 1997. Participants were selected based upon their level of involvement in the international financial system, and taking into account geographical balance and population size. Other ministerial meetings, such as those of the employment ministers, development ministers, agricultural ministers or trade ministers were convened as required. Following the financial and economic crisis, the meeting of the finance ministers and central bank governors was followed for the first time by the summit of the G20 heads of state and government. Both of these events took place in Washington D.C. in November 2008.

As in the G7 process, the “sherpas” play a central role here. These personal representatives of the heads of state and government are invited several times a year by the G20 presidency to attend working meetings to prepare and follow up on the summits. Further to this, the respective G20 presidency can convene working and expert meetings whenever it sees a need for these, in line with the agenda it has set. The sherpa for Germany (personal representative of the Federal Chancellor for the G7/G20) is Prof. Dr. Lars Hendrik Röller, the Federal Chancellor’s economic and financial policy adviser.

Further information about the programme of the G20 can be found here.