G7 Finance Ministers on Saturday voiced concern about the sputtering global economy as they looked for a plan to stoke growth, while a currency policy clash overshadowed their meetings. The club of rich nations also pledged to tackle tax avoidance in the wake of the Panama Papers investigation and beef up efforts to disrupt the murky world of terrorism financing.
Two days of talks at a hot spring resort in northern Japan focused on how to stoke global growth which they said was under threat from myriad challenges, including terrorism, refugee flows and the threat of Britain’s exit from the European Union.
The ministers were unanimous in opposing the prospect of a ‘Brexit’, saying it would inflict a ‘shock’ on the global economy that would only worsen the outlook at a time of geopolitical instability. Host Japan was keen to get its G7 counterparts on board with the view that fiscal stimulus is the best way to kickstart global growth, but Germany and Britain were cool on the idea.
Today, the group suggested a go-your-own-way approach. “(We) discussed how to employ a balanced policy mix -monetary, fiscal, and structural - taking into account country-specific circumstances,” they said in concluding remarks.
Japan's determination to tame the resurgent yen was another sensitive topic, after its repeated threats to intervene in forex markets put it on a collision course with its G7 counterparts. The yen has seen several steep jumps since the start of the year, soaring more than 10 per cent against the greenback at one stage, in a blow to Japan's exporters just as the economy slowed.