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What is the G7? A look at the economic summit coming to France this month

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The G7 Finance ministers and central bank governors meeting in Chantilly ahead of the summit in Biarritz in August
The G7 Finance ministers and central bank governors meeting in Chantilly ahead of the summit in Biarritz in August -
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Ian Langsdon/Pool via REUTERS
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France is gearing up to host the Group of Seven (G7) nations for the international bloc’s annual summit.

From August 24 to August 26, heads of state from seven of the world’s largest economies will descend on the seaside town of Biarritz towards the end of France’s vacation season.

But what issues could be on the table for the G7 this year especially following US President Donald Trump's withdrawal from the group's final communiqué last year?

Euronews takes a look.

What is the G7?

The G7 is an informal group of seven nations that discusses economic and international issues at an annual summit.

  • Canada
  • France
  • Germany
  • Italy
  • Japan
  • United Kingdom
  • United States

The group was created in 1975 as the Group of Six with Canada joining a year later so that advanced democracies could discuss economic policies. The European Union also became a member but does not hold the rotating presidency.

The G7 was the Group of Eight (G8) between 1998 and 2014 when Russia was suspended for its annexation of Crimea which many states considered to be illegal.

The presidency rotates amongst the seven members and the group typically issues a final statement or communiqué of agreed-upon initiatives.

The G7 has often been viewed as a group of "rich nations".

What to look out for in Biarritz

Economists expect that international economic issues such as technology, trade, and the International Monetary Fund (IMF) will come up at this year’s G7 meeting. This would include the US/China and US/EU trade relationships as well as the succession of Christine Lagarde at the IMF.

Europe recently designated their IMF candidate as the Bulgarian and World Bank chief executive Kristalina Georgieva.

Economists also expect Facebook's new cryptocurrency Libra to be discussed after France announced plans to create a G7 cryptocurrency "task force" to investigate money laundering and consumer protection issues related to these new currencies.

International taxation on digital companies could also be on the discussion table. France released a summary of the G7 finance ministers' July meeting stating that they had reached agreement on international taxation.

Trump later threatened to target French wine over France's tax on large technology companies.

But some economists say the summit’s importance shouldn’t be “overemphasised”.

“In practice, the G7 has been somewhat downgraded by the emergence of the G20 as the premier format for international economic policy coordination in late 2008,” said Nicolas Véron, an economist at the Peterson Institute for International Economics and senior fellow at Brussels-based think tank Bruegel.

“For example, if you think of major issues of global economic governance like the role of the IMF and financial regulation and international finance in general, in the last ten years that has tended to be more of a matter of the G20 than the G7.”

Nonetheless, this G7 summit should feature some interesting first meetings.

Trump and Boris Johnson will likely meet for the first time since Johnson became the UK’s new Prime Minister.

Last year’s G7

Last year’s G7 summit in Charlevoix, Canada ended with the US president disavowing the final communiqué.

German Chancellor Angela Merkel shared what would become a memorable photograph taken at the summit in which leaders surrounded Trump in what appeared to be a tense exchange. Other photos of the same gathering showed leaders with a slightly more relaxed posture.

But the US president left the G7 summit before the heads of state discussed climate change and German chancellor Angela Merkel called the aftermath “sobering and a bit depressing”.

"I worked hard for a compromise, we struggled with it for a long time ... and then afterwards the withdrawal, so to speak, via tweet, is, of course, sobering and a bit depressing,” she said.

Trump broke from other leaders by calling for Russia to be readmitted into the G7. The year before, the G7 leaders noted that the U.S. was in the process of "reviewing its policies on climate change" and thus was unable to recommit to the Paris agreement.

These disagreements are expected to come up at this year's meeting as well.

“Everybody knows there’s a climate right now which is difficult with Trump’s designation of China as a currency manipulator and the trade situation...there is no meeting of minds presumably in the Group of Seven on most important issues of the day. So I'm not expecting anything big or particularly constructive from the meeting,” Véron said.

Theme of inequality

France holds the presidency of the 2019 G7 and has picked the theme of "fighting inequality" for this year's summit. France is also including a number of other democracies and partners as part of the meeting.

French President Emmanuel Macron talked about the theme at the UN General Assembly meeting last September.

He said he wanted to include other powers because “the time when a club of rich countries could alone define the world’s balances is long gone”.

Those other countries will include “four major partners”: Australia, Chile, India and South Africa, and six African partners: Burkina Faso, Egypt, Senegal, and Rwanda.

How are people preparing locally?

The summit comes during the height of the surfing and beach town’s tourist season, according to the Biarritz office of tourism.

They expect the meeting to impact certain activities but are working to prepare merchants and shopkeepers for several days of disruption.

There are two security zones. The one closest to the beach will have a heightened level of security.

Residents and shop owners will have to present a badge to gain access to the area closest to the water which will be subject to heightened security.

“It’s insane,” a local merchant told France 2’s evening newscast. “It would have been nice to do it in October or November. But during the height of the summer season… many [merchants] won’t survive the G7.”