This was the first meeting of the G7 finance ministers in 2007. It was chaired by German Finance Minister Peer Steinbrück. Germany holds the G8 Presidency this year.
The G8 is made up of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States. Russia is not included in the group of finance ministers, hence the use of "G7" in this case.
In their statement the finance ministers reported that global growth has become more balanced and that performance remains favorable in the G7 economies. They indicated that risks have abated as a result of lower energy prices and moderate inflationary pressures, but that vigilance is required nonetheless.
Responsibility for free trade
They expressed their support for the relaunch of the Doha trade negotiations announced in Geneva and stated their firm belief that all participants have the responsibility to ensure a successful outcome of the Doha round. This would enhance global growth, contribute to poverty reduction, and help secure the full benefits of trade for developing countries.
They noted that exchange rates should reflect economic fundamentals. In their view it would be desirable to see a movement in exchange rates in emerging economies with large current account surpluses so that necessary adjustments can occur.
Bond markets and hedge funds
They met with finance ministers from a number of key emerging market economies to discuss the role of local bond markets in fostering growth and financial stability. The G7 feel that the development of local currency bond markets deserves higher priority to reduce emerging country vulnerability to the effects of external financial crises and to promote growth.
They discussed recent developments in global financial markets, including hedge funds, noting that these instruments have contributed significantly to the efficiency of the financial system. At the same time they pointed out that the assessment of potential risks associated with this type of investment has become more challenging and underscored the need for vigilance.
They indicated their intention to engage in an exchange of views with the private sector as well as to ask the Financial Stability Forum to update its 2000 Report on Highly Leveraged Institutions.
They reaffirmed their belief that fundamental reform of the International Monetary Fund (IMF) is necessary for it to maintain its credibility and effectiveness in the changing global economy. They remain committed to enhancing the participation and voice of low-income countries.
They agreed to develop an action plan, together with African partners, aimed at helping African countries promote effective budget processes, transparency, and improvement of tax systems.
Energy efficiency and diversification
They consider energy efficiency and the promotion of energy diversification to be an increasingly important issue. They agreed that market-based policy measures, which could include taxes and emission trading, should be effectively designed to meet specific conditions in each country.