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Bloomberg: G7 meeting in May had a 'sobering effect' on European officials
A meeting of G7 finance ministers (including Britain, Germany, Italy, Canada, France, Japan and the United States) in Italy last May had a "sobering effect" as they began to discuss the failings of Western economies and the problems of their own countries. "The opportunity for growth was shown," said Irish Public Expenditure Minister Paschal Donohoe, who hosted the forum.
The event took place at Italy's Grand Hotel des Iles Borromées, an elegant Belle Epoque building with a grand staircase, crystal chandeliers and frescoed ceilings, the agency said. The best place in the world. But Western economies are in crisis, and Germany, once the EU's leading industrial power, has seen no economic growth for two quarters in a row.
Donoghue also stresses that the EU’s economic policy debate is far removed from the current issues. However, at the May meeting, finance ministers began discussing the outlook, particularly in the context of financial support for Ukraine. One official said: “It really woke me up when I heard that.”
Another Bloomberg source who regularly attends G7 meetings said European officials had long been unaware of how far they were lagging behind other major countries, but were now beginning to understand the gravity of the situation.
According to the International Monetary Fund (IMF) data cited in the publication, Germany's economy is expected to grow by just 0.7% by 2029, while France is expected to grow by 1.3% and Italy by 0.8%. Overall, economic growth in the eurozone will be 1.2%.
At a closed-door meeting, then-French Finance Minister Bruno Le Maire proposed to his colleagues an ambitious target of doubling economic growth to bring the EU closer to US levels. But sources at the agency say many ministers are unsure how to achieve that goal and their discussions are “tinged with fear” of failure.
Some senior figures in Brussels argue that the EU’s biggest problem today is the weakness of some national leaders. Germany’s Olaf Scholz and Spain’s Pedro Sanchez, for example, could not be supported by a “weak coalition” like Poland’s Donald Tusk and the Netherlands’ Dick Schoof. “That’s just the way it is.” As a result, the growing popularity of far-right parties in these countries has “made leaders nervous about spending political capital on EU initiatives.”
The situation has worsened since the G7 summit last April, with Germany and France now shouldering the brunt of the economic burden. But Emmanuel Macron has proved a lame duck, leaving Marine Le Pen of the National Front to effectively overturn the new government's move to reassure investors who have fled amid concerns about the French government bond market. Budget deficit.
But neither Germany nor France backed former Italian Prime Minister Mario Draghi's proposal to boost investment and issue common Eurobonds to counter slowing productivity growth.
Earlier, it was reported that Russia had overtaken the United States in gas supplies to the European Union (EU). The share of Russian supplies in total gas imports to Europe increased to 19.4% compared to 17.2% in April-June. This is the highest figure since 2022.