The G7: From Global Governance to Geoeconomics

The Group of Seven (G7) has served as a tool for advancing its members’ foreign (economic) policy objectives. It is not a formal institution but a group of countries — Canada, France, Germany, Italy, Japan, the UK, and the US — that chose to meet annually at the highest level, forming an institutionalised forum to address pressing economic and political issues. The selection of these countries was deliberate: when they first convened in Rambouillet in 1975, they represented the economic and political core of the US sphere of influence. At the time, they accounted for more than two-thirds of the global economy, positioning themselves as indispensable players in global economic governance and justifying the creation of this new format.

From its inception, the G7 has grappled with a fundamental tension regarding its actual role in the international arena, reflecting the dual purpose for which it was established. On one hand, it was meant to contribute publicly to global economic governance, acknowledging the limits of national solutions in the wake of the first oil shock. On the other hand, it also aimed to reaffirm Western unity, which had been severely tested by the transformations of the early 1970s. As a result, some viewed it as a mechanism for genuine policy coordination among leading industrialised nations, while others saw it as a rhetorical exercise — a display of unity with little substantive impact.

From Coordination to Communication

During its early years, the G7 attempted to coordinate its members’ economic policies, reflecting the spirit of the technocratic elite of the time. The first four summits sought to establish a coordinated economic strategy, culminating in the 1978 Bonn Summit. Based on the “locomotive theory”, the Bonn Summit envisioned stronger economies — the “locomotives” — driving global growth, while weaker ones prioritised inflation control and trade liberalisation.

The 1979 Tokyo Summit then attempted to address the second oil shock by setting collective oil import targets. However, the economic turbulence of the late 1970s, coupled with resurgent inflation, eroded confidence in collective economic management and Keynesian solutions. Advocates of neoliberal reforms, such as Margaret Thatcher and Ronald Reagan, discredited the idea of “buying” economic stability through coordinated expansionary policies. The failure of sustained economic cooperation was not just an ideological clash between Keynesians and neoliberals but a result of transatlantic economic competition. No G7 member was willing to bear the costs of reforming the international economic system in a more equitable way as demanded by the developing countries, preferring instead to shift the burden onto others, including their partners.

As the G7’s original goal of economic policy coordination waned, its other purpose — reaffirming and communicating transatlantic unity — grew increasingly central. The 1983 Williamsburg Summit marked a turning point after the divisive 1980–1982 downturn, solidifying US leadership over the Western bloc. Western European leaders recognised the need for transatlantic cohesion, especially amid renewed tensions with the Soviet Union. Williamsburg transformed the G7 into a platform for strategic messaging, framing US hegemony more acceptably and sustainably. It became a platform for governments to advocate for national interests, with Europeans often appearing in opposition to the US. However, these confrontations were largely performative, driven by domestic politics or tactical positioning. At the same time, the G7 advanced American interests through value-based rhetoric, particularly under Reagan, increasingly framing its agenda around neoliberal capitalism, democracy, freedom, and human rights.

The 1983 Williamsburg Summit was pivotal in this shift, and subsequent summits throughout the 1980s reinforced universalist rhetoric that gained further prominence after the Cold War.The G7 advanced American interests through value-based rhetoric, particularly under Reagan, increasingly framing its agenda around neoliberal capitalism, democracy, freedom, and human rights.  With Russia’s inclusion in the 1990s, the G7 temporarily became the G8, symbolising a new global order where US-led Western economic and political values seemed unchallenged. However, the G8 format ultimately proved to be a short-lived experiment, with Russia leaving in 2014 after the invasion of Crimea.

The Revenge of Geopolitics

In the post–Cold War years, G7 summitry was progressively shaped as a strategic instrument of the US-led West. At the same time, the economic transformations of the long 1980s and 1990s facilitated the rise of new capitalist entrants and planted the seeds for powerful challengers. The G20, created in 1999 to address the Asian financial crisis, embodied the hope that old and new actors could cooperate. However, the 2008 financial crisis marked a turning point for the G7, undermining the legitimacy of the universalist rhetoric of Western-led globalisation and giving rise to alternative narratives, with China at the forefront.

Over the last decade, global affairs have increasingly been framed as a contest between the West and an emerging alternative and revisionist coalition, often labelled the “Global South”. Led by China, this coalition has leveraged its economic influence to shape a forum to sustain its strategy, leading to the creation of BRICS in 2009. Originally comprising Brazil, Russia, India, China, and South Africa, the group expanded in 2024 and now represents nearly half of global GDP. Yet, even more than its Western counterpart, BRICS is characterised by internal competition, making it less effective as a policy instrument but, again, a potent tool for shaping global discourse and sustaining a geoeconomic strategy.

The G7 remains a potentially valuable tool for advancing its members’ economic and political objectives. Even more than its Western counterpart, BRICS is characterised by internal competition, making it less effective as a policy instrument  However, it is not as effective as it once was, particularly for the United States. Washington had supported the G7’s creation to structure its relationship with its Western European allies, whose combined economic power rivalled that of the US. Today, the EU and its member states are arguably weaker, both economically and politically, reducing American concerns over European strategic autonomy from Washington.