G7 finance ministers meet in Japan ahead of leaders’ summit

Financial leaders from the Group of Seven (G7) will meet on Friday for the second day of a three-day summit in the Japanese coastal city of Niigata.

The summit is setting the financial agenda for an early meeting of the group’s leaders in Hiroshima next week.

What’s on the agenda?

On the agenda for Friday’s negotiations are topics such as support for Ukraine, global economic growth, inflation and the US stalemate over raising the national debt ceiling.

While China plays an important role on most issues, it has not been listed as an official topic for the closed-door meetings.

However, some media reports said finance ministers could debate, at least informally, possible investment controls against China.

Another important topic that was expected to dominate discussions was the domestic political stalemate over the US debt ceiling and possible default.

US Treasury Secretary Janet Yellen said “a moratorium is frankly unthinkable”.

“America must never default. It would be a catastrophe,” she told reporters ahead of the talks.

Kazuo Ueda, governor of Japan’s central bank, said a US default “will become a big move and a big problem, and I think the Fed alone, for example, might not be able to neutralize it.”

Speaking on the sidelines of Friday’s talks, German Finance Minister Christian Lindner told reporters he expects US policymakers to make an “adult” decision on raising the debt ceiling, echoing concerns about the impact on global economy.

Financial leaders of the G7 advanced economies are also discussing measures to prevent Russia from evading sanctions imposed on Moscow over its war in Ukraine, Japanese Finance Minister Shunichi Suzuki told reporters.

The US has said the G7 “will stay with Ukraine as long as it takes” to end the conflict.

“We’ve taken a wave of action in recent months to clamp down on evasion. And my team has traveled around the world to step up that work,” Yellen said.

US seeks action against China

As the group’s current chairman, Japan, seeks to diversify supply chains and reduce its heavy reliance on China, the G7 countries appear cautious about how far they can go in the fight against China.

The US pressed for stronger measures against Beijing. On Thursday, Yellen said many G7 members were concerned about China’s use of “economic coercion” against other countries and called for measures to curb such behavior.

“We’ve been involved in discussions with our G7 colleagues, and I hope that continues these meetings, at least in some informal way,” Yellen said of US pressure to impose such restrictions.

fb/rs (AFP, AP, dpa, Reuters)