The Group of Seven (G-7) is an intergovernmental organization made up of the world’s largest developed economies: France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. Government leaders of these countries meet periodically to address international economic and monetary issues, with each member taking over the presidency on a rotating basis.
The G-7 was, for a while, known as the Group of Eight (G-8), until 2014 when former member Russia was removed after annexing the region of Crimea illegally from Ukraine. The European Union (EU) is sometimes considered to be a de-facto eighth member of the G-7 since it holds all the rights and responsibilities of full members except to chair or host meetings.
G-7 countries consist of the U.S., U.K., France, Germany, Italy, Canada, and Japan.
The G-7 was formerly referred to as the G-8 until Russia was suspended from the group in 2014 after illegally annexing Crimea.
The G-7 is not an official, formal entity and, therefore, has no legislative or authoritative power to enforce the recommended policies and plans it compiles.
The major purpose of the G-7 is to discuss and sometimes act in concert to help resolve global problems, with a special focus on economic issues. Since its inception in the early 1970s, the group has discussed financial crises, monetary systems, and major world crises, such as oil shortages.
The G-7 has also launched initiatives to fund issues and relieve crises where it sees an opportunity for joint action. Those efforts include several aimed at debt relief for developing nations.
In 1996, working with the World Bank, the G-7 launched an initiative for the 42 heavily indebted poor countries (HIPC), along with a Multilateral Debt Relief Initiative (MDRI), a 2005 pledge to cancel the International Development Association debt of countries that have gone through the MDRI program.
The amount of money the G-7 provided in 1997 to help build the containment of the reactor meltdown at Chernobyl.
In 1999, the group also decided to get more directly involved in “managing the international monetary system” by creating the Financial Stability Forum (FSB) made up of major national financial authorities, such as finance ministers, central bankers, and international financial bodies.
The origins of the group date back to the early 1970s, when leaders of the U.S., U.K., France, West Germany, and Japan met informally in Paris to discuss the then recession and oil crisis. That, in turn, inspired French President Valery Giscard d’Estaing to invite the leaders of those countries, plus Italy, to Rambouillet in 1975 for further discussions on global oil, this time with the country’s leaders joining the finance ministers; an attendance roster that has endured. The next year, Canada was invited to join the group.
The G-7 has responded as the global economy has evolved, including when the Soviet Union pledged to create an economy with freer markets and held its first direct presidential election in 1991. Following a 1994 G-7 meeting in Naples, President Boris Yeltsin held meetings with G-7 member countries, in what became known as the P-8 (Political 8). In 1998, after urging from leaders including U.S. President Bill Clinton, Russia was added to the G-7 as a full member, creating a formal Group of Eight, or G-8.
The G-8 ended up being short-lived. In 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine. As of 2020, Russia has not been invited back to the G-7.
As developing nations began to represent a larger part of the global economy, the absence of a forum about international financial matters that included those emerging economies became more glaring.
In response, the Group of 20 (G-20) was created in 1999, comprising all the members of the G-7, plus 12 additional countries and the EU. As the economies and trade activity of markets such as China, Brazil, India, Mexico, and South Africa–all G-20 members –surge, many observers now see the G-20 as usurping much of the role and eminence once held by the G-7.