G7 - U.S. Treasury Sec Tim Geithner, European Central Bank Pres meeting Feb 5-6 at a location 195 miles south of Arctic Circle

Jan. 18 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner, European Central Bank President Jean-Claude Trichet and their Group of Seven counterparts face few distractions when they meet in an Arctic outpost to rein in diverging policies on the future of bank regulation.

Canadian Finance Minister Jim Flaherty will host G-7 finance chiefs and central bankers Feb. 5-6 in Iqaluit, a town 195 miles south of the Arctic Circle. He says he’ll press for more unity after the U.S., U.K. and France imposed levies on banks or bonuses even after Group of 20 leaders in September promised to “raise standards together.”

“We’re trying to have a synchronized approach and clearly some jurisdictions are going in different directions,” Flaherty said in a Jan. 12 interview in Swift Current, Saskatchewan.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aNxi_6BTOVIk

G7 economies approach the ugly moment of transition- massive deficit spending & liquidity creation by central banks cannot be long maintaintained

UPI | Walker's World: Beware the Greeks

December 14, 2009

... The G7 economies are approaching the ugly moment of transition. The massive deficit spending by states and liquidity creation by central banks cannot be long maintained. They are running out of ammunition. Within the next six to 18 months, they will have to rein in the deficit spending and increase interest rates, and hope that the private economy will by then have recovered sufficiently to restore growth. It is very questionable whether the private economy is healthy enough to do this. And in the case of weak economies like Greece, governments will then face an ugly choice between depression and default.

The crisis may come sooner, because of the growing threat of a major currency crisis. Since China will not revalue its currency and alleviate the problem of chronic imbalances, the United States is letting the dollar fall against more flexible currencies. This is pushing the burden of adjustment onto the euro and the yen in a way that is becoming unsustainable for eurozone exporters.

A currency crisis would be disastrous and probably trigger a wave of populist protectionism against Chinese exports. That is the main reason why the "recovery" is so unconvincing and also why gold remains above $1,000 an ounce. The risks are ahead are as daunting in Greece as they are in Denmark ... READ MORE

http://www.upi.com/Top_News/Analysis/2009/12/14/Walkers-World-Beware-the-Greeks/UPI-58431260799200/

iii.co.uk | China is the G7's elephant in the room

LONDON, Oct 12 (Reuters) - The currency emphasis of the Group of Seven finance chiefs' Istanbul meeting last week was that the dollar should depreciate against "emergent Asia".
ECB Governing Council member Guy Quaden was explicit, saying, "The problem is not the exchange rate of the dollar against the euro but rather the relationship between the dollar and certain Asian currencies -- to mention one, the Chinese yuan."
For the G7, China is the elephant in the room. The trouble is you cannot push an elephant around....

Forbes | ANALYSIS-Group of Seven (G7) fights irrelevance in new world order

ISTANBUL, Oct 4 (Reuters) - After decades in charge, the club of rich, industrialised nations is fast losing sway as a share of global economic power shifts towards big developing countries. That was a lesson of the Group of Seven's meeting in Istanbul at the weekend, when the absence of China showed the G7 could no longer tackle the world's economic problems on its own...........

TheAge.com.au | China, India gain in crisis fallout: World Bank

Dominique Strauss-Kahn, managing director of the IMF, says the days of the G7 - an elite gathering of policymakers from the US, Britain, Japan, Germany, ...

Voice of America News | G7 Ministers Pledge Continued Stimulus Spending

03 October 2009 - Finance ministers from the Group of Seven large industrialized countries pledged Saturday to continue government spending programs until an economic recovery is assured.

The ministers, meeting in Istanbul, said the recovery was still fragile and warned that high unemployment rates remain a concern along with volatile currency exchange rates.

Before the meeting, some officials said the weakness of the U.S. dollar, which has long been the world's main reserve currency, could undermine the global economic recovery.

In its final statement, the G7 - which includes the United States, Britain, Canada, France, Germany, Italy and Japan - said "disorderly movements" in the value of currencies will hurt economic and financial stability.

The dollar is used for key international transactions and to price commodities like oil, but the growing U.S. debt has caused the dollar to lose value in trading against other currencies.

The G7 statement welcomed China's commitment to a more flexible exchange rate, which could help promote more balanced trade.

A coalition of the world's developing countries, known as the Group of 24, also met on Saturday.

The G24 demanded that poorer nations be granted more power at key international economic organizations like the International Monetary Fund.

Last month, world leaders agreed to make the Group of 20 the world's premier decision making body on global economic issues.

G-20 members include the United States, Brazil, China, Indonesia, Mexico, France, Germany, the European Union, Argentina, Australia, Britain, Canada, India, Italy, Japan, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.

Reuters | US wants policymaking by a Group of Four that would bring the United States, the Euro zone and Japan together with China

G7 considering its future, may form smaller group

Sat Oct 3, 2009 4:57am EDT STANBUL (Reuters) - The Group of Seven rich nations hopes to decide its future as an institution on Saturday, with the United States pushing for the creation of a smaller core group that would include China, a G7 official said.

The official, speaking on condition of anonymity, said Washington wanted to see the G7 supplanted in global economic policymaking by a Group of Four that would bring the United States, the euro zone and Japan together with China.

The official was speaking ahead of a meeting of G7 finance ministers and central bankers in Istanbul later on Saturday. The G7 is gathering on the sidelines of the semiannual meetings of the International Monetary Fund and World Bank.

For more than a decade, the G7 dominated international policymaking. But the financial crisis has undermined its power, as big developing economies such as China have become key to managing the global recovery.

Any formal move to supplant the G7, which comprises Britain, Canada, France, Germany, Italy, Japan and the United States, would likely be diplomatically complex and controversial.

Its top finance officials have traditionally met several times a year, seeking to guide foreign exchange rates and other markets through communiques released after their meetings.

But the group's role has appeared in doubt since a larger group of nations, the G20, earlier this year became the main forum for debating the financial crisis. The G20 has agreed in principle to tighten financial regulation and try to reduce trade imbalances that destabilize the global economy.

"The G7 is not quite dead, but it is losing its relevance," the IMF's managing director, Dominique Strauss-Kahn, was quoted as saying by Emerging Markets magazine on Saturday. "It's on its way to extinction."

Reuters | G20 to focus on IMF - Could this finally mean goodbye G7, hello G20?

Tags: G20; G8; G7; BRIC; IMF; emerging markets; Brazil; Russia; India; China

The role of emerging markets in the International Monetary Fund and the amount of money the IMF has to play with could be a big theme at this weekend’s G20.

The IMF was promised $500 billion in extra resources at the April G20 summit in London, as part of a $1.1 trillion package to boost the global economy.

The coffers have been looking a bit light, with the IMF saying at the end of July it had pledges of a little more than $200 billion.

But things have started to hot up this week.

EU finance ministers agreed to increase their contribution to 125 billion euros ($178 billion), from around $100 billion pledged in March.

Britain also said it was ready to provide $11 billion in extra funds, taking its total contribution to $26 billion.

China signed a deal this week to buy $50 billion in an IMF bond denominated in the IMF’s unit of account, the special drawing right (SDR).

Investors will be looking to see whether Brazil and Russia follow suit, as they have also expressed interest in buying an IMF SDR bond.

Brazil, Russia, India and China — the four biggest emerging economies – may be issuing their own communique this weekend, possibly ahead of the final G20 statement.

A reward for more contributions could be a greater say on the IMF’s board. The U.S. is pressing for the G20 summit in Pittsburgh to agree to give emerging countries greater voting power at the IMF, G20 officials told Reuters this week.

“The G20 are showing they mean business,” says Simon Quijano-Evans, emerging Europe economist at Cheuvreux in Vienna.

Could this finally mean goodbye G7, hello G20?