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6/7/15

Germany: Scrap the G7 and its summit - it is hopeless, divided and outdated - by Larry Elliott

Angela Merkel and her guests will pose for the group photo and say all the right things at their press conferences. The richest nations in the world, they will say, have never been closer, never more united in their commitment to solving the pressing problems of today. Yes, it’s that time of year again: the annual G7 summit.

The get-togethers started after the first oil shock in the 1970s but have long since mattered. The G7 is a moribund institution and has been for the past decade. As an instrument of the internationalism it was set up to pursue, it is hopeless. It should be scrapped.

It takes a number of ingredients to make an international body work. There have to be problems that need solving. There has to be some degree of unanimity about how those problems should be solved. And there has to be leadership to ensure that unanimity when it is not immediately forthcoming.

Only the first of those ingredients currently exists. The G7 has plenty to talk about: Greece; Ukraine; the next set of development goals and how to finance them; climate change; trade; the weakness of the global recovery; how to engineer the exit from the zero interest rate environment of the past six years; combating systematic tax evasion; and tackling inequality. David Cameron wants the Fifa scandal to prompt a wider discussion about corruption.

What it does not have, and has not had since 2010, is a common view about how to go about achieving any of these aims. When the global financial crisis was raging, ideological differences did not matter. The G7 all cut interest rates and they all ran bigger budget deficits in an attempt to stimulate growth. But the consensus did not last, and divisions opened up. The Americans said growth should take priority over deficit reduction; the Germans, backed by the British, said that without a rapid return to fiscal rectitude there could be no sustainable growth.

Nor has a dominant figure emerged who is prepared to take charge, someone prepared to chivvy the reluctant into agreeing to be ambitious in those areas where there is a degree of consensus, such as the repeated promises to support development in the world’s poorest countries.

The one G7 leader who could do this is Barack Obama, and the expectation was that he would take up the mantle of leadership when Gordon Brown lost power in 2010. The US president has proved unwilling or unable to do so, with the result that the G7 leaders meet, issue a vapid communiqué, and hotfoot it back to the airport as fast they can.

Read more: Scrap the G7 and its summit - it is hopeless, divided and outdated | Larry Elliott | Business | The Guardian

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