Group Of Seven (G-7) – Defined
The group of Seven (G-7) is a group of the economically most advanced countries of the world. It is comprised of France, Germany, Italy, Japan, United States, United Kingdom, and Canada. The group meets once or more every year to discuss global economic and monetary policies and issues.
History of the G-7
The concept of such a forum of the world’s most industrialized nations was established before the oil crisis of 1973, when there was an informal gathering of high-ranking government financial officials from the United States, West Germany, France and the United Kingdom. Later in mid-1973, Japan was included in the group to make it a group of five.
In 1975, France hosted a summit with representatives from the six most advanced governments: France, West Germany, Italy, Japan, the United States and the United Kingdom in Chateau de Rambouillet to discuss the current oil crisis and other issues. This group met annually (with a rotating presidency) to form what was known as the G-6. In 1976, Canada was invited to join the group and it became the G-7. The first meeting of the G-7 was held in the same year in Puerto Rico and was hosted by the the United States. Since then, the G-7 meets annually (or more frequently) in any of the member countries on a rotating basis. All of the members of the group host the meeting in turns.
Role of the G-7
The G-7 plays an important role in addressing global issues. The seven nations represent a little more than 50% of the global economy. The G-7 contributes significantly in proposing economic policies and reforms to prevent global recession. They discuss major economic issues like financial crises, monetary reforms, oil shortages, etc.
Expansion to G-8
Russia was invited as an observer in the meeting held in 1997 (after the end of Cold War) by the Prime Minister of United Kingdom and the United States. Later in 1998, Russia was formally invited to be a member of the group. The addition of Russia created the Group of 8 or G-8, which lasted from 1998 to 2014. In 2014, Russia was removed from the group after the annexation of Crimea.
Diminishing Power and Role
In 1999, the G-7 got more directly involved in managing global monetary systems through the financial stability forum and formation of the G-20 including members of the G-7, European Union and 12 additional countries from emerging markets like China, India, Brazil, Mexico and South Africa. This helps to effectively manage and influence global economic reforms.