The Group of Seven (G7)

The G7 serves as a forum for highly industrialized democracies to coordinate economic, security, and energy policy, but critics say that its membership is outdated, undermining its relevance to global governance.

Last updated May 11, 2017

Former UK Prime Minister David Cameron, former U.S. President Barack Obama, German Chancellor Angela Merkel, and others watch a Champion League soccer final during a summit in 2012. (Pete Souza/Reuters)
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Introduction

The Group of Seven (G7) is an informal bloc of industrialized democracies—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—that meets annually to discuss issues such as global economic governance, international security, and energy policy. Proponents say the forum's small and relatively homogenous membership promotes collective decision making, but critics note that it often lacks follow-through and excludes important emerging powers.

Russia belonged to the forum from 1998 through 2014—then the Group of Eight (G8)—but was suspended after its annexation of Crimea in March of that year. The G7’s future has been challenged by continued tensions over Ukraine, concerns over the eurozone's economic performance, and the larger Group of Twenty’s (G20) rise as an alternative forum. Meanwhile, the election of U.S. President Donald J. Trump has thrown the bloc’s traditional commitment to free trade into turmoil and raised questions over its cooperation on global climate policy.

Membership

France, Italy, Japan, the United Kingdom, the United States, and West Germany formed the Group of Six in 1975 (Canada joined the following year) to provide a venue for the non-Communist powers to address pressing economic concerns, which included inflation and a recession sparked by the OPEC oil embargo. Cold War politics invariably entered the group’s agenda.

The European Union has participated fully in the G7 since 1981 as a “nonenumerated” member. It is represented by the presidents of the European Council, which comprises the EU member states’ leaders, and the European Commission, the EU’s executive body. There is no formal criteria for membership, but participants are all developed democracies. The aggregate GDP of G7 member states makes up nearly 50 percent of the global economy, down from nearly 70 percent three decades ago.

G7 GDP as a share of Global GDP

 

Unlike the United Nations or the NATO, the G7 is not a formal institution with a charter and a secretariat. Instead, the presidency, which rotates annually among member states, is responsible for setting the agenda and arranging logistics. Ministers and envoys, known as sherpas, hammer out policy initiatives at meetings that precede the annual summit of national leaders.

The Russian Outlier

Russia formally joined the group in 1998 after partially participating in prior years’ summits. Then U.S. President Bill Clinton thought that admitting Russia to the exclusive club would lend international prestige and encourage its first post-Soviet leader, Boris Yeltsin, to consolidate democratic gains and hew more closely to the West. Clinton also believed that membership would help mollify Russia as the NATO security alliance opened its doors to former Soviet satellites in Eastern Europe.

But Clinton’s decision to include Russia drew pushback from within the G7. Among the detractors, the U.S. Treasury and other finance ministries were wary of coordinating global economic policy with Russia, which at the time had a relatively small economy and large public debt. Indeed, the ministerial track for finance continued to meet as the G7, even as leaders and foreign ministers convened as the G8.

Russia’s backsliding toward authoritarianism under President Vladimir Putin made starker the disjunction between Moscow and the other members, as did its foreign policy. At the 2013 summit in Northern Ireland, Russia’s patronage of Syrian President Bashar al-Assad in the midst of the Syrian civil war stood in marked contrast to the position of the other member states. Putin resisted other members’ demands that the summit’s communiqué call for Assad to leave office.

Russia held the G8 presidency for the first time in 2006 and once again in 2014, though the latter effectively lasted only a few weeks, as Moscow's annexation of Crimea in March 2014 drew swift censure from its peers. “We will suspend our participation in the G8 until Russia changes course and the environment comes back to where the G8 is able to have a meaningful discussion,” the G7 leaders said in a joint statement.

The decision of the seven other members to pull out of the planned 2014 summit in Sochi, Russia, and meet instead as a reconstituted G7 in Brussels was little more than a symbolic diplomatic step, many analysts say. The measure was “basically a reprimand saying you're not in our club, you don't meet certain standards of international behavior, much less domestic behavior,” says CFR Senior Fellow Stewart Patrick.

Worsening Relations

The standoff between Russia and Ukraine has persisted into 2017, with little sign of resolution. As conflict between Ukraine’s military and Russian-backed rebel forces in eastern Ukraine intensified in 2014, the United States and Europe ratcheted up sanctions in an effort to further isolate Russia. In April 2014, G7 leaders met to coordinate sanctions against Russia, although members diverged on how far to go. The EU, which has deep economic ties to Russia, imposed penalties on a number of state officials and pro-Russia separatist leaders, but did not initially join the United States in sanctioning several prominent Russian businessmen, including Igor Sechin, chairman of the state-owned oil firm Rosneft.

The political calculus shifted in July 2014, when Malaysia Airlines Flight MH17, en route from Amsterdam to Kuala Lumpur, crashed in eastern Ukraine, apparently hit by antiaircraft missiles fired by the Russia-backed rebels. The death of all 298 passengers, mostly Europeans, hardened the EU’s position against Russia, and on July 30, the G7 announced an expanded set of sanctions. “Regrettably however, Russia has not changed course,” the leaders' statement read, “We believe it is essential to demonstrate to the Russian leadership that it must stop its support for the separatists in eastern Ukraine.” A Dutch-led investigation team later confirmed that the missile was of Russian origin and was fired from territory controlled by pro-Russia militants.

G7 leaders tied the lifting of sanctions to the successful implementation of the Minsk accords.

In September 2014, the United States and the EU again tightened sanctions on Russia, including restrictions on major Russian financial, energy, and arms enterprises. As Russia fell into a deep recession in 2015, G7 leaders tied the lifting of sanctions to the successful implementation of the Minsk accords, a peace plan that called for a cease-fire and a withdrawal of heavy weaponry from eastern Ukraine.

The Minsk agreement has been largely ignored, and Russia announced sanctions of its own against eighty-nine European officials in May 2015. The Russian economy has gradually recovered, returning to growth in 2016. The Ukraine conflict has hardened into a standoff, with the country’s easternmost provinces under de facto Russian control, while Ukrainian President Petro Poroshenko has isolated the east through trade and energy blockades.

Tensions have also risen over Russia’s role in Syria, especially in the wake of chemical attacks linked to government forces, as well as accusations of Russian interference in U.S. and European elections. While Trump’s election raised the possibility of a détente with Russia, sanctions remain. In May 2017, German Chancellor Angela Merkel met with Putin and indicated that EU sanctions would continue indefinitely. However, divisions emerged within the G7 over a 2017 proposal to impose fresh sanctions on Russia, which ultimately failed.

Reviving the G7

The reconstituted G7 will likely be better poised to facilitate collective action, experts say. Without Russia, the group is more “like-minded and capable,” says Patrick, with both common interests and common values. But while suspending Russia may have improved the G7’s ability to speak with one voice, many analysts note that voice is not as influential as it once was. “As new players have emerged in recent decades, the global power balance has shifted, leaving the G7 representative of a smaller piece of the pie. Any organization that does not include China, for example, is not truly global,” wrote Ian Bremmer, president of the Eurasia Group, in March 2014.

The G8 often garnered criticism for its failure to deliver on ambitious commitments, particularly with respect to development assistance. Civil society organizations drew attention to noncompliance and a lack of transparency, and since 2010, members have published an annual accountability report. Meanwhile, various nongovernmental organizations do scorekeeping of their own. Whether the revived G7 improves on the G8’s record remains to be seen.

President Trump’s shifting of U.S. priorities has also threatened G7 unity on a number of issues, with trade and climate policy chief among them. The run-up to the G7 summit in Sicily in May 2017 was overshadowed by Trump’s protectionist tone, leading to uncertainty over the G7’s traditional embrace of free trade. Trump has also heavily criticized the 2015 Paris Agreement on climate change, and the future of that deal is expected to be high on the agenda in Sicily.

Meanwhile, the G7 must also contend with a laundry list of longstanding economic challenges, including improving growth in the eurozone, promoting economic reforms throughout Europe, resolving ongoing debates over “austerity” policies to reduce budget deficits, and preventing the Greek debt crisis from once again becoming an existential threat to the European economy. 

Rise of the G20

Many analysts believe the power and prestige of the G20, a forum of finance ministers and central bank governors from nineteen of the world’s largest countries plus the EU, has surpassed that of the G7. Emerging powers such as Brazil, China, India, Mexico, and South Africa, whose absence from the G8 was often noted, all belong to the G20. Russia remains a member of the G20, which, Patrick says, “is much more where they belong.” It’s member countries represent about 80 percent of global GDP and two-thirds of the world’s population.

U.S. President Barack Obama seemed to affirm this in 2011, calling the G20 the “premier forum for global economic coordination.” Many observers note that the forum was most effective during the financial crisis; G20 leaders first met in Washington in 2008 after the fall of Lehman Brothers.

The United States blocked a planned reference to the need to 'resist all forms of protectionism.'

“The Washington summit in 2008 and the London summit in 2009 did much to avert a new great depression,” writes the Brookings Institution's Thomas Wright. “Unprecedented cooperation between the world’s largest economies provided liquidity that limited the contagion of the banking crisis, kept markets open and prevented countries from resorting to protectionism, and provided a stimulus that cushioned the drop in growth.”

But as that sense of urgency subsided, multilateral consensus was harder to come by. “We are now living in a G-Zero world, one in which no single country or bloc of countries has the political and economic leverage—or the will—to drive a truly international agenda,” wrote Bremmer and economist Nouriel Roubini in Foreign Affairs in 2011. For the time being, the G20 seems unlikely to replicate its preeminence in economic governance in the realm of international security. Mexico hosted the first meeting of G20 foreign ministers in February 2012, but that has since not been a regular event.

Still, G20 summits have been the occasion for ambitious goals. At the November 2014 G20 summit, hosted by Australia, leaders adopted a plan to boost their economies by a collective 2.1 percent, which they did not achieve. In Hangzhou, China, in 2016, President Barack Obama and Chinese Premier Xi Jinping used the summit to jointly announce their accession to the Paris Agreement. Ahead of the July 2017 meeting set for Germany, however, leaders are already divided by trade issues after the United States blocked a planned reference to the need to “resist all forms of protectionism.”

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Resources Up

This 2017 Associated Press report from Ukraine investigates the status of the conflict in the country’s east and the Minsk accords.

The University of Toronto's G8 Information Center compiles primary sources from ministerial meetings and summits, analysis, and compliance studies.

The UK Department for International Development compiled the most recent accountability report for the erstwhile G8.

The Overseas Development Institute, a British think tank, critiques the official report's methodology.

Ian Bremmer and Nouriel Roubini argue in this 2011 Foreign Affairs essay that the heyday of the G7 and G20 has passed. Bremmer revisited the argument in the New Statesman in 2013.