The main topics on the agenda, as set out by this year's Japan presidency, are the global economy, investment, trade, the refugee crisis, climate change and energy, the fight against terrorism, foreign policy and development. Leaders will also discuss several global health policy issues, gender equality and women’s rights.
GLOBAL ECONOMY
G7 leaders will take stock of the global economy, and will discuss commitments to further strengthening economic policy responses to the growing global economic uncertainty, including structural, monetary and fiscal measures.
The role of the EU: Despite a more difficult global environment, the EU’s recovery continues. According to the EU’s latest economic forecast (3 May), the economy in all Member States is expected to grow next year – albeit unevenly –; unemployment in Europe is expected to fall below the 10% mark in 2017; and the fiscal outlook is continuing to improve as the general government deficit and the debt-to-GDP ratio will continue to decline gradually in both the euro area and the EU as a whole. As external factors supporting Europe's moderate recovery are fading, domestic sources of growth are gaining in importance. In its Spring 2016 European Semester package, presented on 18 May, the Commission’s country-specific recommendations focused on three priority areas: investment (still low compared to pre-crisis levels but gaining traction, also helped by the Investment Plan for Europe); faster progress on structural reforms (necessary to boost the recovery and raise the long-term growth potential of EU economies); and the need for all Member States to pursue responsible fiscal policies and ensure growth-friendly composition of their budgets.
INVESTMENT
G7 Leaders will address the global demand-supply gap in investment and will help promoting infrastructure investments. They will discuss G7 commitments to invest in areas that contribute to sustainable growth, like green growth, energy and the digital economy.
The role of the EU: the Investment Plan for Europe – Investment is a top priority for the EU. After a take-off in record time, the brand new Investment Plan for Europe “InvestEU” is kick-starting investments of at least €315 billion into the real economy over three years. In less than one year into its existence, the European Fund for Strategic Investments (EFSI) has already mobilised more than €100 billion across the European Union. 141,000 small and medium enterprises will already enjoy better access to finance, thanks to the Investment Plan.
The Investment Plan has started to produce structural change. Until now, European investment has often been dominated by a limited number of large, expensive projects. Today, we are starting to see more local projects, which are smaller and more diverse. Public money is mobilising private finance, and supporting structural reforms. We see more interaction between the European Investment Bank and local institutions. In short, we are beginning to see the investment that the market has often failed to deliver.
EFSI is helping to find new treatments for Alzheimer's disease; transforming old industrial sites into new offices; bringing energy efficiency into our homes and cutting our bills; and lending a hand to start-ups who were turned away by other lenders. In more than half of our projects, research and development are pushing the boundaries of what we can achieve.
The money for InvestEU does not solely come from reallocations from the EU budget. EU Member States – as well as non-EU countries – can contribute either at the level of the risk-bearing capacity, through a brand new European Investment Project Portal (EIPP) – the online meeting place for project promotors and investors – or by directly co-financing certain projects and activities. More info on http://ec.europa.eu/invest-eu.
TRADE
At the summit, the G7 members are likely to send a strong message in support of free trade as a tool to promote jobs and higher living standards, including calling for strengthening the rules-based multilateral trading system and the functions of the WTO.The issue of global excess capacity, especially in the steel sector, will also be addressed. Furthermore, the G7 summit will be an occasion for the EU to take stock of the ongoing trade negotiations with Japan and the US.
“Trade for all”: the EU’s new trade strategy – Trade remains a key component of the Commission’s strategy for jobs, growth and investment. The EU is the world’s largest trading bloc and a staunch defender of fair and open trade and of the multilateral trading system.
Last autumn, the Commission presented a new trade and investment strategy for the European Union, entitled ‘Trade for All: Towards a more responsible trade and investment policy’. The new strategy will make EU trade policy more responsible and based on three key principles:
1. Effectiveness: Making sure trade actually delivers on its promise of new economic opportunities. That means addressing the issues that affect today’s economy, which involves services and digital trade. It also means including provisions for SMEs in future trade agreements.
2. Transparency: Opening up negotiations to more public scrutiny by publishing key negotiating texts from all negotiations, as is being done in the TTIP negotiations.
3. Values: Using trade agreements as levers to promote sustainable development and European values such as human rights, fair and ethical trade and the fight against corruption. This means including rules on human rights, sustainable development and good governance in future trade agreements with third countries.
The overall goal of the EU’s trade policy is to create growth and jobs in Europe, promote development around the world and strengthen ties with important trading partners. The EU has a busy agenda of bilateral negotiations, including for a free trade agreement with Japan. It has concluded a number of other agreements, for example the recent one with South Korea that has already brought much benefit to European exporters. The EU currently has a number of agreements pending ratification. The EU is also actively engaged in ongoing multilateral or plurilateral trade initiatives. One of the major ongoing negotiations is the Transatlantic Trade and Investment Partnership (TTIP) with the EU’s most important trading partner, the United States. By building this transatlantic economic partnership, the EU also wants to globally help carve new standards and rules, and safeguard existing ones.
The EU wants to stay at the forefront in developing rules for the global economic trade, to shape globalisation. It was in the framework of the TTIP negotiations that the European Commission developed and proposed a new, modernised approach on investment protection: the Investment Court System. This approach has been included in recent agreements with Canada and Vietnam.
More on the EU’s trade policy.
TAX TRANSPARENCY
Building on the G20 and OECD commitments, G7 leaders are also likely to call for consistent action in the field of tax transparency, in order to restore public trust in tax systems.
The role of the EU – a top priority for this European Commission has been to deliver on combating tax avoidance and tax evasion. Significant progress has already been achieved.
In 2015, we presented an Action Plan for a fair and efficient corporate tax system in the EU as well as an ambitious tax transparency agenda to tackle corporate tax avoidance and harmful tax competition in the EU. We have seen considerable success on each of these fronts.
Late last year we achieved a landmark agreement in the EU on sharing information on tax rulings. This was a major step forward that will provide national authorities with much needed insight on aggressive tax planning. The EU finalised and signed agreements in 2015 on the automatic exchange of financial information of EU residents in Switzerland, Liechtenstein, Andorra and San Marino. Negotiations with Monaco have also been finalised and signature of the related agreement is foreseen in the coming months.
Since May 2015, the 4th Anti-Money Laundering Directive requires Member States to put in place central registers on beneficial ownership of all EU companies and other legal arrangements like trusts – this is currently being implemented by Member States. In October 2015, a political agreement on the automatic exchange of information on tax rulings amongst Member States was reached.
In January 2016, the Commission presented its Anti Tax Avoidance package. Key features of the new package included legally-binding measures to block the most common methods used by companies to avoid paying tax; a recommendation to Member States on how to prevent tax treaty abuse; a proposal for the sharing of tax-related information on multinationals operating in the EU; actions to promote tax good governance internationally; and a new EU process for listing third countries that refuse to play fair. We have already made a lot of headway on these initiatives.
In March 2016, Member States came to a speedy agreement after only forty days on the automatic exchange of information on country-by-country reports of multinational companies.
The Commission also came forward in April with a new legislative proposal on EU and non-EU multinational groups a yearly public country-by-country reporting on the profit and tax paid and other relevant information. Under this proposal, anyone interested would be able to see how much tax the largest multinationals operating in Europe pay.
The scourge of tax avoidance is an issue of global significance. We look forward to pursuing our far-reaching strategy towards fair taxation and greater transparency together with all our partners in the international arena.
REFUGEE CRISIS
At the G7 summit, leaders are expected to call for a global response to a global crisis – the most serious refugee crisis since World War II – including by providing assistance and by helping to resettle refugees.
The role of the EU: – The Syrian refugee crisis has become the world's worst humanitarian and security disaster. The European Union was first to see this as an international crisis that required concerted global action. As early as spring 2015, the EU put in place a strategy to address all aspects of the crisis: saving lives at sea and providing humanitarian assistance to all in need; strengthening external EU borders and launching a European Border and Coast Guard; supporting Member States under the most pressure with financial and technical assistance; relocating and resettling people in need of international protection across the EU; returning irregular migrants to their home countries; and creating safe and legal routes for asylum-seekers from outside the EU. In 2015-16, the EU will have devoted more than €10 billion to managing the refugee crisis. For 2016, the EU and its Member States pledged more than €3 billion to assist the Syrian people in Syria as well as refugees and the communities hosting them in neighbouring countries.
As a part of its overall strategy to manage the refugee crisis, the EU and Turkey in March 2016 formally agreed to end the irregular migration from Turkey to the EU and replace it instead with legal channels of resettlement of refugees to the European Union, in full compliance with European and international law. This new approach has started to deliver results, with a sharp decrease seen in the number of people irregularly crossing the Aegean from Turkey into Greece.For 2016-17, the EU has already mobilised a total of €3 billion under the Facility for Refugees in Turkey, and another €3 billion may become available thereafter.
For the medium and long term, the European Commission has taken up the challenges it is encountering during the refugee crisis, and presented proposals earlier this month to reform the Common European Asylum System by creating a fairer, more efficient and more sustainable system for allocating asylum applications among Member States. Overall, The European Commission's agenda on migration, one of the priorities of this Commission, sets out a European response, combining internal and external policies, making best use of EU agencies and tools, and involving all actors: EU countries and institutions, international organisations, civil society, local authorities and national partners outside the EU.
THE FIGHT AGAINST TERRORISM
In line with last year’s Schloss Elmau G7 agreement to strengthen and coordinate efforts to address the global threat of terrorism, G7 leaders are expected to step up their efforts to counter terrorist financing, the flow of foreign terrorist fighters, arms and equipment, and to support other countries in their fight against terrorism. The discussions should lead to the adoption of a G7 Action Plan on Countering Terrorism and Violent Extremism.
The role of the EU – Building on the 2015 European Agenda on Security, the European Commission in recent monthslaunched the European Counter-Terrorism Centre, presented new laws to better control firearms, and reached agreement on the Passenger-Name Record system for airlines. The EU’s Radicalisation Awareness Network shares new ideas between the teachers, youth workers and other public servants who are in daily contact with vulnerable youngsters. In April, the Commission put forward new proposals to achieve an effective and genuine EU Security Union. Aim is to buildthe necessary tools, infrastructure and environment at European level for national authorities to work effectively together to address transnational threats such as terrorism, organised crime and cybercrime. The measures include: addressing the threats posed by returning foreign terrorist fighters; preventing and fighting radicalisation; sanctioning terrorists and their backers; improving information exchange; strengthening the European Counter Terrorism Centre; cutting the access of terrorists to funds, firearms and explosives; and protecting citizens and critical infrastructures. Moreover, in order to ensure greater coherence between internal and external actions in the field of security, and drawing on the work of the EU Counter Terrorism Coordinator, the Commission and the EEAS, the EU will initiate anti-terrorism partnerships with countries around the Mediterranean. More on the European Agenda on Security.
FOREIGN POLICY
During the G7 summit, members will exchange views and seek common ground on the most pressing foreign policy challenges, including Ukraine/Russia, the situation in Syria, Iran and Libya. Also the security situation with regard to North Korea and the East and South China Seas will be addressed.
The EU’s support to Ukraine – The EU remains a key actor in the ongoing process to bring a solution to the crisis in Ukraine that respects its territorial integrity, sovereignty and independence, as well as international law.
The European Commission continues its support for the government of Ukraine’s plans for reforms across a broad range of sectors. Faced with economic recession and the ongoing instability in the east of the country, Ukraine last year requested additional financial assistance from the EU and its other partners. The programme proposed, worth €1.8 billion, follows the €1.6 billion that we already delivered in 2014/2015 and is part of an unprecedented package of support. The EU-Ukraine Association Agreement, already approved by 27 EU Member States and the European Parliament, including its Deep and Comprehensive Free-Trade Area, remains provisionally applied, giving both the EU and Ukraine new opportunities for business and trade.
In April, the European Commission proposed to lift visa requirements for Ukrainian citizens for short-stay travel to the Schengen area. This will facilitate mobility, but also encourage trade and cooperation and build trust and understanding. The fight against corruption has been an essential condition for visa liberalisation, and it remains an urgent priority for the country as a whole. The independence, integrity and operational capacity of new public institutions will be crucial. Ukraine's political leaders have a responsibility to work together and seek unity by putting their country's future first.
In relation to the situation in eastern Ukraine, the EU remains committed to a complete implementation of the Minsk Agreements, starting with a full and proper ceasefire. The EU stands strong and united against aggression and destabilisation, but also believes in the virtues of dialogue and diplomacy.
Russia - Economic sanctions against Russia have been in place since July 2014 and were last renewed by the European Council in December 2015. The duration of the sanctions is directly linked to a full implementation of the Minsk Agreements. At the same time, the EU keeps the lines of communication with Russia open, and also engages selectively on foreign policy issues where there is a clear interest. The EU supports Russian civil society and invests in people-to-people contacts. The EU is also strengthening relations with its Eastern partners and other neighbours, including in Central Asia.
Iran – The EU, through EU High Representative Federica Mogherini, showed leadership in facilitating last year’s nuclear agreement with Iran, and is now working with its international partners to implement it. Following reassurance that Iran's intentions are peaceful, economic and financial sanctions related to nuclear programme were lifted. The most recent step in EU-Iran relations was the landmark visit to Tehran on 16 April by High Representative/Vice-President Mogherini and seven other Commissioners. The EU has put in place a regular political dialogue, while cooperation will focus amongst others on human rights, the economy, trade and investment, climate and energy, aviation, nuclear safety, migration, science, research, education and culture.
Iraq - In response to the conflicts in Iraq and Syria, and to counter the global Da'esh threat, the EU adopted the EU Regional Strategy for Syria and Iraq as well as the Da'esh threat, on 16 March 2015. For Iraq the strategy foresees a mix of humanitarian and resilience aid, support for the stabilisation of areas liberated form Da'esh, support for rule of law, good governance and improved economic performance, as well as non-military support to the various lines of effort of the Global Coalition to counter Da'esh. It comes with an aid package of €1 billion for Syria and Iraq, which has in the meantime grown to €1.7 billion, for the years 2015 and 2016, out of which more than €200 million are dedicated to Iraq. The implementation of the strategy is in full swing in coordination with the EU Member States and other partners. The EU and Iraq, moreover, signed a Partnership and Cooperation Agreement in 2012 which is already being implemented provisionally, focusing on human rights, trade, economic and energy issues, pending the treaty's full ratification.
Libya – The European Union is working closely with the United Nations in support of the Government of National Accord, which it considers the sole legitimate government of Libya. On 18 April, the Foreign Affairs Council welcomed the arrival of the Presidency Council to Tripoli on 30 March, which paves the way for the effective government of the country by the Government of National Accord. The EU has called for Libyan ownership of a political process that must be as inclusive as possible. It has committed to support the Government of National Accord with a €100 million package of immediate assistance in different areas.
Syria – The European Union is actively supporting the efforts to restore peace in the war-ravaged Syria. We are fully behind the Geneva talks led by the UN Special Envoy Staffan de Mistura. The EU is also part of the International Syria Support Group. It calls for an end to the indiscriminate use of weapons and cessation of hostilities, humanitarian access to besieged and hard-to-reach areas, and the launch of a Syrian-led political transition.
The EU and its Member States are the leading donors in humanitarian and economic assistance. Last February, at the "Supporting Syria and the Region" conference held in London, the EU and its Member States pledged more than €3 billion to assist Syrian people inside Syria as refugees and the communities hosting them in the neighbouring countries for the year 2016. This comes on top of the €6 billion that the EU and its Member States had already committed.
CLIMATE ACTION AND ENERGY
The G7 will discuss how to lead the efforts of the international community, building on the outcome of the climate change Conference of the Parties (COP21) in Paris, in December last year. Leaders will also address energy policy issues, against the background of decreasing energy security.
The role of the EU: The European Union was the first major economy to table its commitment in the run up to the Paris climate conference COP21 and now looks forward to having the Agreement ratified and entering into force swiftly.
The EU has the world’s most ambitious commitments on climate change: a reduction target of at least 40% in greenhouse gas (GHG) emissions by 2030 compared to 1990; to at least 27% of total energy consumption from renewable energy; and to at least 27% increase in energy efficiency. The Paris Agreement vindicates the EU's approach. Implementing the 2030 energy and climate framework as agreed by the European Council is a priority in follow up to the Paris Agreement. Europe has shown that it is possible to act: from 1990 to 2013, EU emissions declined 19% while GDP grew 45%. The EU is currently the most GHG-efficient major economy in the world, and encourages other nations to follow, to match this ambition.
Climate action has been part of the political and legislative agenda for many years and is an integral part of the European Energy Union strategy – one of the priority policy areas of the Juncker Commission. Other dimensions of the EU’s Energy Union strategy are: supplying security by diversifying Europe’s energy sources; fully integrating the internal energy market by enabling energy to flow freely across the EU using interconnectors; increasing energy efficiency in order to consume less energy and reduce pollution; supporting research and innovation in low-carbon technologies.
Turning Europe into a highly energy-efficient and low-carbon economy will also boost the economy, create jobs and strengthen Europe's competitiveness: according to Eurostat 2012 data, the EU already has 4.3 million people working in green industries. This is a real success story for European industry even in times of an economic slowdown. It is estimated that the 2030 climate and energy framework would create up to 700,000 additional jobs in Europe. With more ambitious renewable energy and energy efficiency, net employment could increase by up to 1.2 million jobs.
More info on EU Energy Union and Climate policy: http://ec.europa.eu/priorities/energy-union-and-climate_en.
DEVELOPMENT
G7 leaders will discuss the next steps towards the implementation of the 17 Sustainable Development Goals (SDGs), as set out in the United Nations’ 2030 Agenda for Sustainable Development, adopted in September 2015.
The role of the EU: The EU has played an important role in shaping the 2030 Agendafor Sustainable Development, through public consultations, dialogue with its partners and in-depth research. The EU will continue to play a leading role as it moves into the implementation of this ambitious, transformative and universal Agenda that delivers poverty eradication and sustainable development for all.
The European Union, together with its Member States, is the world's largest aid donor, providing more than half of the total Official Development Assistance (ODA) reported last year by members of the Development Assistance Committee of the Organisation for Economic Co-Operation and Development (OECD-DAC). EU collective Official Development Assistance has increased to €68 billion in 2015 (up 15% from €59 billion in 2014) – growing for the third year in a row. This is the highest share of Gross National Income ever. EU collective ODA represented 0.47% of EU Gross National Income (GNI) in 2015, an increase from 0.43% in 2014. This is significantly above the non-EU Development Assistance Committee (DAC) country average of 0.21% ODA/GNI. Five EU Member States exceeded the 0.7% ODA/GNI mark: Sweden (1.4%), Luxembourg (0.93%), Denmark (0.85%), and the Netherlands (0.76%) and the United Kingdom (0.71%).
2015 also saw the highest support for development aid amongst EU citizens in 6 years. Almost nine out of ten EU citizens support development (89% - a 4 percentage point increase since 2014), while more than half say that promised levels of aid should be delivered by the EU.
EU development policy seeks to eradicate poverty in a context of sustainable development. It is a cornerstone of EU relations with the outside world – alongside foreign, security and trade policy (and international aspects of other policies like environment, agriculture and fisheries).
Over the last decade, thanks to EU funding, almost 14 million pupils could go to primary school, more than 70 million people were linked to improved drinking water, and over 7.5 million births were attended by skilled health workers, saving the lives of mothers and babies. EU development aid goes to around 150 countries in the world. Since 2014, the EU is phasing out direct aid to large countries that have experienced strong economic growth and managed to reduce poverty, and is focussing on the poorest regions in the world instead. In the period 2014-2020, about 75% of EU support will go to these regions which, in addition, often are hard hit by natural disasters or conflict. EU aid will also focus more on certain sectors such as good governance, human rights, democracy, health, education, but also agriculture and energy. The EU applies a system of “Policy coherence for development” in policy areas such as trade and finance, agriculture, security, climate change or migration, in order to foster growth and overcome poverty in development countries, by – for example – opening its large single market to these countries, or setting up standards to fight illegal exploitation of natural resources. The EU is strongly committed to making aid more effective. The European Commission is part of the Steering Committee of the Global Partnership for Effective Development Cooperation. Based on European values, the EU promotes, in its relations with partners countries, democratic values and practises such as human rights, fundamental freedoms, good governance and the rule of law. Gender equality is an important element of the EU approach. More info on EU development aid: http://ec.europa.eu/europeaid/home_en.
OTHER IMPORTANT ISSUES ON THE AGENDA
At the Ise-Shima G7 summit, leaders will discuss a series of global health policy issues, including approaches to control infectious diseases, strengthening the response to public health emergencies such as the Ebola or Zika outbreaks, and ensuring the provision of lifelong healthcare services. Building on the progress made at the Schloss Elmau G7 Summit in 2015, several issues with a specific relevance to gender equality and women’s rights will also be on the agenda.
G7 OUTREACH MEETINGS
Traditionally, a number of third country heads of state and government, as well as chairpersons of international organisations, are invited to participate in parts of the summit. From ASEAN member states, the heads of state and government of Laos, Vietnam, Indonesia, Bangladesh, Sri Lanka, and Papua New Guinea are invited. In addition, the head of state and government of Chad – the current Chairperson of the African Union – and, from the international organisations, the chairpersons of the UN, OECD, ADB, IMF and the World Bank are invited. As the Ise-Shima summit is the first summit held in Asia in eight years, the Japanese hosts have indicated that the topic of one of the outreach meetings will focus on Asia. In another outreach session, participants will address the Sustainable Development Goals, with a focus on Africa.
THE EU AS G7 MEMBER
The European Union is a full member in the G7 and takes part in its work at all levels. Since the entry into force of the Lisbon Treaty the EU is represented by both the President of the European Commission and the President of the European Council. The G7 is a forum for discussion where leaders take commitments to achieve common objectives, putting their credibility at stake. In doing so, the G7 provides critical leadership to address global challenges.
In 1977, representatives of the then European Community began participating in the London Summit. The first G7 summit was held two years earlier, in 1975 in Rambouillet (France). Originally, the EU's role was limited to those areas in which it had exclusive competences, but this has changed with time. The European Commission was gradually included in all political discussions on the summit agenda and took part in all summit working sessions, as of the Ottawa Summit (1981).
Japan will hand over the Presidency to Italy for 2017. The Presidency will continue in its rotation to Canada in 2018, France in 2019, the USA in 2020 and the United Kingdom in 2021.
