A vade mecum for Italy’s G7 presidency
Following Germany this year and Japan in 2016, Italy will assume the rotating presidency of the G7 in 2017. However, even the global governance aficionados could wonder whether this matters at all.
This blog post is based on the paper “Governance economica mondiale: il ruolo dell’Italia nel G20 e nel G7” written for the Italian Parliament and Ministry of Foreign Affairs.
In the end, the G7 in its current composition represents a small and declining share of world GDP and population, which has led some commentators to conclude that the forum has by now “outlived its purpose”. Furthermore, the rotating presidency gives countries only the power to set the agenda, but the latter is then usually hijacked by current affairs.
While not fully refuting these premises, it is our conviction that (i) the G7 has still a role to play and (ii) following some basic principles, the rotating presidency could maximise the effectiveness of its agenda setting power.
From global economic steering committee to amplifier of Western views
The G7 as we know it was convened for the first time in 1976 as the Western powers of the time were trying to grapple with the collapse of the Bretton Woods system, stagflation, and the oil crises of the 70s. A restricted composition, informal procedures, and its membership – including all the largest economies of the world – made the forum a de facto global economic and financial steering committee.
The system worked for over a decade until a series of financial crises in Latin America and Asia during the 90s showed how it was no longer possible to ignore completely emerging countries when discussing global growth, monetary policy coordination, and inflation. This trend was accentuated over the next decade by the rise of the so-called BRICS, and most notably China. By the time the Global Financial Crisis hit, it was evident to all that the G7 could no longer be the appropriate forum to put together a coordinated response and in 2008 the G20 at leaders-level was first convened.
All this is well known, but the natural question arising could be why the new more-encompassing G20 has not ended up replacing the G7 and rather Western leaders have continued meeting in such a format. A big part of the answer lies in the survey of the Sherpas conducted for Bruegel in 2014 by Alessio Terzi and Lord O’Neill. G7 leaders attach a very high value to having an occasion where they can meet informally to discuss among like-minded democracies about problems affecting them all, ranging from foreign and security policy to managing ageing societies, migration, and the rise of extremist movements. Moreover, the feeling is that the overall homogeneity of views allows speedy tangible progress to be made on these dossiers.
As such, while it is certainly true that the G7 is not fit for the purpose of acting as a global economic steering committee, it can still act as an occasion to crystallise a Western position around the big global topics of the moment before they are discussed at the G20 or in other international settings.
In 2017, the interaction between the two G-fora could be facilitated even more by the fact that, while Italy holds the rotating presidency of the G7, Germany will be in charge of organising the G20. An early effective coordination between the two European countries already at the stage of setting the agenda and the dates of the meetings could foster even further the function of the G7 as amplifier of the Western views and values in a global context.
The “CIP” strategy for the rotating presidency
The G7 is not an institution, does not have a permanent secretariat, nor a founding treaty or rulebook. However, some principles of good practice can be drawn from past experiences in order to maximise the success of a presidency in shaping the debate in the forum, leading it to tangible action:
- Continuity: The problems discussed at the G7 are usually not of the kind that can be solved at the stroke of a pen, but would rather require a multi-annual implementation of agreements and potential adjustment of policies along the way. Every government would like to show to its own electorate how it has taken its priorities to the world stage. However, it is worth rolling forward some of the previous presidency’s suggestions if the forum’s decision-making is to be made more effective and the presidency be perceived as a greater success.
- Inclusiveness: The rotating presidency grants a country the right to set the agenda. However, due to its composition, including some of the world’s most powerful leaders, combined with the lack of enforceable rules of procedure, the G7 can easily drift away from the pre-set agenda. To minimise this risk, the rotating presidency should choose topics of discussion that are as much as possible of common interest to all members and resist the temptation of ramming through its own priorities for discussion. Within this context, aside from holding bilateral meetings with G7 partners, it might be worth reaching out to other Western non-G7 members (Spain, the Netherlands, etc.) in order to collect their positions and arrive at the summit as an ambassador of a wider group.
- Preparation: As discussed above, at every G7 summit, leaders will irremediably end up discussing at least partially about the headlines of the day. While this is unavoidable, the best way to mitigate the risk that current affairs completely derail the attention away from the agenda is to arrive at the summit having done as much background work as possible. During the year of a presidency, Sherpas and relevant ministers should meet on several occasions to hammer out detailed agreements so that the day of the summit limited discussion will be needed and rather technical deals will merely require political sanctioning.
In an increasingly borderless and globalised world, coordination at the international level is becoming all the more important. While the creation of the G20 has relieved the G7 from the pressing role of managing the world economy, the small Western forum retains a role to play. Its flexibility and informality are both its blessing and its curse. Some countries manage to leverage these characteristics to make the most out of their rotating presidency, pushing the G7 into tangible action. To be among these, the Italian government should soon start preparations along the lines suggested by this vade mecum.
 Its ancestors include the “Library Group” and the G5.
 Sherpas are the high-level aides of heads of state or of governments for all issues related to the G7.
 Within the G20, the importance of the continuity of the agenda has been codified in the establishment of a “Troika” structure, where every rotating presidency is accompanied in its workings by the previous and the future presidency.
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