G7: The last hurrah

Rumours were spreading around Istanbul today that the G7 would not issue a communique when it meets tomorrow, depriving currency traders of their regular opportunities to undertake close textual analysis of the always bland and meaningless words on currencies.

But G7 officials now say they would be amazed if there was no communique. Some finance ministers worry that their counterparts would claim that they have persuaded the rest of the G7 to adopt their pet policy to a national audience, if they are not bound by a piece of paper. Other G7 officials say that issuing communiques is what the G7 now does, so there is no point to a meeting without one.

But there is little doubt here that the G7 is enjoying a last hurrah. Two G7 officials I have spoken to said the reason the G7 could not be ditched at the G20 summit last week in Pittsburgh was that Canada (G7/8 chair in 2010) kicked up a stink and insisted it got its long-planned global summit of world leaders next year. That was why France was given the G20 chair for 2011, alongside the normal rotation which also gives it the G7/8. The French plan to wind up the G7 for most practical issues.

It will still meet occasionally – to discuss rich country issues such as aid, debt-relief and currency issues between the dollar, sterling, yen and euro. The G7 will also continue to act as an unofficial club within the G20, World Bank and IMF. But all those meetings and the regular denouncements of “excess volatility and disorderly movements in exchange rates” will go. That is, unless a “save the G7″ movement springs up.

I doubt it.

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