June 3, 2016

The Third G7 Summit without Putin

Oleksiy Volovych

Since 1975, when Paris hosted the first Summit of the “Group of Six” (G6), which the following year turned into the “Group of Seven” (G7) after Canada's joining it, Japan hosted the G7 leaders on May 26-27, 2016 for the sixth time. In general, it was the 42nd Summit of G7, which in 1998 was transformed into G8 having been joined by Russia. However, since 2014, after Russia's annexation of the Ukrainian Crimea, for the third year in a row G7 Summits take place without Russia's participation.

This time the G7 Summit was held on the island of Honshu in Mie Prefecture in Ise-Shima National Park on the Pacific coast near the main Shinto shrine — the Temple of Ise, founded in the III century CE. Apart from the G7 leaders, the Summit was also attended by European Council President Donald Tusk and European Commission President Jean-Claude Juncker. Among the official guests of the G7 Summit, there were heads of state of Indonesia, Chad, Sri Lanka, Bangladesh, Vietnam, Laos and Papua New Guinea, the UN Secretary General, the President of the Asian Development Bank, the Managing Director of the International Monetary Fund and the World Bank President.

It should be noted that within the framework of preparations for the G7 Summit, in Japan there was a series of meetings of specialized ministers of G7 countries — of foreign affairs, agriculture, information and communication technologies, energy engineering, education, environmental protection, science, technologies and finances. Each meeting of relevant Ministers of G7 adopted final documents in the form of recommendations to state leaders of G7.

The Agenda

On the agenda of the Summit there were the following issues: problems of the global economy and trade, energy and energy efficiency, development of infrastructure, cyber-security, fighting corruption, public health care, the rights of women and children, international politics and security, struggle against extremism and terrorism, the problem of migrants and refugees, as well as local conflicts and the situation in Syria, Iraq, Iran, North Korea, Ukraine, Libya, Afghanistan, Yemen, Africa, and Venezuela. The Summit also discussed security issues of maritime navigation, nuclear non-proliferation and disarmament, nuclear safety, human rights, climate change and environment, the Agenda for Sustainable Development until 2030 and food security.

The main decisions on the above-mentioned issues and problems were fixed in the final “Declaration of G7 Summit leaders in Ise-Shima” as well as in a number of separate documents. In this brief review, we will analyze two issues: measures to avoid a new crisis of the global economy and the Russian-Ukrainian conflict.

Problems of the Global Economy

In his speech at the Summit of G7, Japanese Prime Minister Shinzo Abe warned his colleagues about the danger of repetition of the 2008 economic crisis. According to him, the world economy is at a crossroads, and if wrong measures are taken, “the international community can face a crisis, the scale of which would be beyond normal economic cycles”.

According to the participants of G7 Summit, the global economic growth has slowed down and remains below the potential, while weak growth risks remain. The escalation of local conflicts, terrorism and refugee flows make the global economic environment more complicated and pose a serious threat to the foundations of the current international order and universal values and principles. The G7 countries take responsibility to lead international efforts to address these problems. After the adoption of the Agenda for Sustainable Development until 2030, as well as the Paris Agreement on Climate Change last year, leaders of the G7 countries are determined to continue making efforts to fulfill their obligations to ensure harmony, security and prosperity of the world.

G7 Summit participants pledged to collectively solve current economic problems to ensure sustainable long-term growth of the global economy, which is recognized by them as a top priority. Taking into consideration the peculiarities of each country, the G7 leaders pledged to lead their economic policy on the basis of cooperation to achieve strong, sustainable and balanced growth model. In particular, the leaders of the “Group of Seven” reaffirmed their commitment to use all policy tools — monetary, fiscal, money-and-credit, and structural — individually and collectively, to strengthen the global demand and supply and to achieve a strong, sustainable and balanced growth of the global economy. The participants of the G7 Summit expressed their commitment to promote structural reforms to intensify growth, productivity and potential output, and committed to investing spheres, contributing to economic growth, such as the environment, energy engineering and digital economy, human resource development, education, science and technology.

The leaders of the “Big Seven” expressed their desire with the help of trade to create economic opportunities for workers, consumers and businesses, and also confirmed their intention to continue keeping their markets open and to fight all forms of protectionism. They also pledged to contribute to the negotiations within the framework of the WTO in order to strengthen the based on the internationally accepted rules multilateral trading system and to support efforts to liberalize trade through regional trade agreements, including the Trans-Pacific Partnership (TTP), Economic Partnership Agreement between Japan and the EU, the Transatlantic Trade and Investment Partnership (TTIP) and the Comprehensive Economic and Trade Agreement(CETA). Leaders of the G7 countries recognized that the global overcapacity in the industry, particularly in the steel industry, is the actual structural problem with global consequences, and this issue needs to be urgently addressed by strengthening market functions and eliminating the factors destructing it.

Agreement on economic cooperation between the EU and Japan was signed within the framework of the Summit. The G7 countries pledged to inform each other in advance about a possible change in exchange rates in order to avoid adverse effects on competition.

 

The Economic Potential of “Group of Seven”Compared with the Russian Federation
Prepared by the author based on the CIA-World-Factbook for 2015

N

Indicators

Great Britain

Canada

France

Germany

Italy

Japan

США

The Russian Federation

1

Territory

243.6 thousand square kilometers

9.9 million square kilometers

551.5 thousand square kilometers

357 thousand square kilometers

301.3 thousand square kilometers

377.9 thousand square kilometers

9.8 million square kilometers

17 million square kilometers

2

Population

64 million

35 million

66.5 million

80.8 million

61.8 million

126.9 million

321.3 million

142.4 million

3

GDP in US dollars

2.6 trillion

1.6 trillion

2.6 trillion

3.3 trillion

2.1 trillion

4.6 trillion

17.9 trillion

3.4 trillion

4

GDP growth

2.5

1.2

1.2

1.5

0.8

0.6

2.6

- 3.9

5

GDP per capita in US dollars

41.2 thousand

45.9 thousand

41.4 thousand

47.4 thousand

35.8 thousand

38.2 thousand

56.3 thousand

23.7 thousand

6

Budget — revenues in US dollars

1.1 trillion

585 billion

1.2 trillion

1.5 trillion

876 billion

1.4 trillion

3.2 trillion

216.3 billion

7

Exports in US dollars

442 billion

428.3 billion

509.1 billion

1.2 trillion

454.6 billion

624 billion

1.5 trillion

337.8 billion

8

Imports in US dollars

617 billion

440.9 billion

539 billion

983.9 billion

389.2 billion

625.4 billion

2.3 trillion

197.3 billion

9

Defense spending — % from GDP

2.07

1

1.8

1.1

1.1

0.9

4.3

3.4

10

Military Budget in US dollars (SIPRI)

55.5 billion

18.4 billion

50.9 billion

39.4 billion

23.8 billion

40.9 billion

596 billion

66.4 billion

 

International Issues

The G7 Summit Declaration on international issues strongly condemns terrorism in all its forms and manifestations, in particular terrorist acts against civilians carried out by terrorists of IS, al-Qaeda and other terrorist groups. It also points out that the Internet and social networks are exploited by terrorists all over the world for terrorist, extremist violence and other criminal acts, such as terrorist recruitment, financing, planning and coordination of the attacks.

The leaders of the “Group of Seven” pledged to take the measures set out in the G7 Action Plan to combat terrorism and violent extremism, and to support the implementation of the relevant UN Security Council resolutions providing for the exchange of information in order to strengthen border security, improve aviation security, the struggle against financing of terrorism, trafficking in cultural property and violent extremism.

Leaders of the G7 countries pledged to increase global aid to meet the immediate and long-term needs of refugees and other displaced persons through provision of humanitarian aid, and also intend to improve the socio-economic development of the affected regions, in particular in the sphere of education, health care and infrastructure. The G7 Summit participants urged international financial institutions and donors to increase their financial and technical assistance to refugees and displaced persons and, in particular, welcomed the launch of a new funding initiative to support the Middle East and North Africa. The Summit participants reaffirmed their support for the Arab countries that implement economic and administrative reform to meet new challenges, including the growth of violent extremism, intensification of military conflicts, complex humanitarian crises and huge numbers of refugees.

At the Summit, were voiced concerns that Great Britain's possible exit from the EU after the UK referendum on 23 June “could be a serious blow to the development of an open economy in Europe and the world”.

 

The Russia-Ukraine Conflict

The leaders of the “Group of Seven” expressed confidence that the Russian-Ukrainian conflict can be settled only by diplomatic means and with full respect for international law, providing for the obligation to respect the sovereignty of Ukraine, its territorial integrity and independence. Leaders of the G7 countries reaffirmed “the condemnation of Russia's illegal annexation of the Crimea and its policy of non-recognition” and expressed concern about the continued violence along the line of contact in violation of the cease-fire and urged all parties to take concrete measures for the full cease-fire that is provided by Minsk Agreements.

The leaders of the “Group of Seven” called on all parties “to fulfill their obligations without delay in order to carry out as soon as possible local elections in some regions of Donetsk and Luhansk regions, in accordance with the Minsk Agreements”, and reaffirmed their “strong support for the full implementation of the Minsk Agreements, the work of the «Normandy Format» and the Trilateral contact group”. Leaders of the G7 countries expressed hope that “Russia will fulfill its obligations and will use its influence on the separatists to meet their obligations in full”. They also stressed “the key role of the OSCE in the de-escalation of the crisis,” and called on all parties, in particular on the separatists, to provide observers full and unimpeded access throughout the conflict zone.

The leaders of the “Group of Seven” reminded “the period of sanctions, of course, is linked to the full implementation of the Minsk Agreements by Russia and respect for the sovereignty of Ukraine. Sanctions can be lifted only when Russia meets these obligations. However, we are also ready to take further restrictive measures with a view to increasing losses for Russia if its actions so require”. At the same time, the Summit recognized “the importance of maintaining a dialogue with Russia to ensure compliance with the obligations undertaken by it, as well as international law and achievement of a comprehensive, sustainable and peaceful solution to the crisis”.

The G7 Summit participants appreciated and supported Ukraine's steps to implement comprehensive structural, administrative and economic reforms and called on Kyiv to continue this process and to strengthen the fight against corruption within the framework of the judicial reform, including of the Prosecutor General's Office. The leaders of the “Great Seven” praised high the work of the G 7 Ambassadors' Support Group for Ukraine. As you know, on May 16, on the eve of G7 Summit in Japan, President P. Poroshenko met with the Ambassadors of the “Big Seven” countries and persuaded them that sanctions are “a motivating factor and an effective tool,” which force Russia to implement the Minsk Agreements.

 

Russia's Reaction

Anticipating the impossibility of returning into the “Group of Eight”, Russia long before the G7 Summit in Japan started spreading information that the format of the international forum has supposedly exhausted itself and that Russia no longer sees the point of reopening the “Group of Eight”. As Deputy Minister of Foreign Affairs of the Russian Federation S. Ryabkov stated in his commentary in the middle of April, “... for our country, this format is in the past and we do not see the need to revive what was left in the past and therefore Russia's participation in the G8 to us is a totally irrelevant question”. In turn, the head of the Russian Federation Presidential Administration S. Ivanov pointed out that Moscow “does not cry” for participation in the G8.

According to the Press Secretary of Russian President D. Peskov, “G20 format is more capable in the current international situation, as it has much broader potential”, although D. Peskov should have remembered that all G7 countries are part of the G20 format, and they play a leading role there. However, after V. Putin's rather productive meeting with Japanese Prime Minister Shinzo Abe in Sochi on May 6, the Russian leadership began to hope for lifting or at least easing the sanctions imposed on Russia by the “Group of Seven” and that Putin would be invited to participate in the G8 Summit in Japan. But these hopes were in vain.

Commenting on the decision of the  G7 Summit in Japan on the extension of sanctions against Russia, the above-mentioned S. Ryabkov pointed out that “... the so-called Group of Seven once again delivers signals on the subject of sanctions, which largely is absurd, because the condition for lifting the sanctions, according to the members of this structure, is Russia's fulfillment of the Minsk Agreements, in particular, the withdrawal of Russian troops from the Donbas”. At the same time, S. Ryabkov repeated once again the obvious for the whole world the Kremlin leaders' lies that “by default there is no Russian troops in the Donbas». In his opinion, “they completely ignore the fact that Ukrainian authorities must comply with their part of the Minsk-2 Agreements too”.

Chairman of the Federation Council Committee on International Affairs K. Kosachev compared the G7 Summit in Japan with the Party Congress of the Soviet era. According to him, “Washington's partners in the G7 are needed only if they are in full agreement with its position”. May 27, the day of completion of the G7 Summit in Japan, the Russian government announced its intention to take counter-measures — to extend sanctions against the countries that imposed or acceded to the sanctions against Moscow till the end of 2017. According to experts of the analytical center under the Russian government, the Western countries have lost 9.3 billion US dollars by food embargo.

It is noteworthy that the day before the G7 Summit in Japan, according to Russian media reports, the Head of the Hungarian Ministry of Foreign Affairs P. Szijjártó at a meeting with S. Lavrov said that Hungary is against the automatic procedure of prolonging sanctions and insists on the debate on this issue. This message was accompanied by a forecast that five European countries — Hungary, Greece, Cyprus, Italy and Slovakia, at the end of June, at the EU Summit, could speak for easing of restrictions or even block the extension of sanctions against Russia.

V. Putin himself headed the anti-sanction campaign, having published on the eve of his visit to Greece on 27 May in the Greek newspaper Kathimerini an article entitled “Russia and Greece: Cooperation for Peace and Prosperity.” In it, he once again calls upon Europeans to “draw appropriate conclusions from the events in Ukraine” and tells how Greeks and citizens of other EU countries suffer from Brussels' conflicting with Moscow over Ukraine.

* * *

This G7 Summit's most significant result for Ukraine is the moral support to our country by leaders of major democracies in the world in our confrontation with Russia. Of great importance for the support of Ukraine is the G7 leaders' position on the extension of sanctions against Russia till the end of this year, and the promise to strengthen them, if the Kremlin does not stop its hybrid war against Ukraine in the Donbas. We hope that the position of the “Group of Seven” will be considered at the meeting of the EU Council on 28-29 June. In our opinion, the greatest political and moral sanction was V. Putin's absence on the third in a row G7 Summit. This indicates that the leading democratic countries do not perceive the recurrence of power politics and disregard for international law demonstrated by the Kremlin, especially in recent years.

So support to Ukraine by the leaders of G7 countries is our country's great victory, but it is not a gift, it has been won by Ukrainian diplomats and personally by the President of Ukraine P. Poroshenko during his numerous contacts and talks with the leaders of the “Group of Seven” at different levels. This victory of Ukraine was won in a hard struggle against the hybrid diplomacy and information war of V. Putin's Russia. Without exaggeration, it was a titanic work, and it succeeded. But the support to Ukraine and the European and international community's solidarity, in particular of the G7 countries to great extant depend on how we, Ukrainians, are worthy of support, how far we are able to establish order in the country, to unite the society, to implement the necessary reforms, to strengthen our Armed Forces, to stabilize the socio-political situation in the country, to raise the economy, satisfying, first of all, the urgent needs of ordinary people, not limitless and insatiable desires of the oligarchy.

The stronger we are — the stronger will be the support of our friends, allies, and partners. The weak are not supported by anybody. They are just pitied. And in the best case — are not allowed to die...

The next task is to ensure that the EU Council at its Summit on 28-29 June supports G7's sanctions policy. For this, our government should take a series of effective and extraordinary political and diplomatic measures. One of them, proposed by President of Ukraine P. Poroshenko, could be a tour of the people's heroine Nadia Savchenko and her speaking in the parliaments of leading countries in Europe as well as in the European Parliament and at the Parliamentary Assembly of the Council of Europe, the delegate to which Savchenko was elected December 25, 2014.

N. Savchenko could remind the European parliamentarians that in the Middle Ages, Ukraine-Rus defended Europe from the Tatar-Mongol invasion, lost 8 million of its citizens in the fight against German fascism, and today holds back the onslaught of communist-Horde Putin's Russia. N. Savchenko has to convince Europeans that in case if Ukraine does not withstand this onslaught, the whole Europe will be defeated. Nadia Savchenko could ask the Europeans: Isn't it the time to open a united diplomatic front against Russia and, at last, to help Ukraine with weapons for it to be able to protect itself and you? Is it not time to let Ukraine into the European House, which it is defending?