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G8 finance chiefs focus on energy

01.01.70

Group of Eight finance ministers are set to begin a two-day meeting in St Petersburg, Russia, focusing on high oil prices and their impact on the world economy while studying measures to boost oil market transparency and help poor nations gain access to energy resources.

The ministers are also expected to discuss steps to enhance the public's knowledge of financial instruments and to tackle the potentially negative economic impact of the spread of avian flu in Asia and elsewhere, Japanese Finance Ministry officials said.

The meeting is a preparatory session for the G-8 summit next month in St. Petersburg, which will bring together the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

It is the first time that Russia has held the presidency of the club of the world's most powerful nations.

As the world's biggest natural gas producer and the second biggest oil provider, Russia makes energy security a top priority for its G-8 presidency. Other summit agenda items are promoting education and fighting infectious disease, such as bird flu.

In their talks in February in Moscow, G8 finance ministers called for greater investments by oil producers in exploration, production, transport and refining capacity to ensure stable supply and improved energy efficiency among consumers in a joint quest to curb the seemingly endless rises in oil prices.

Russia is now considering obtaining reliable energy consumption forecasts as part of efforts to stabilise soaring oil prices, which have hovered near record-high levels.

''We need adequate forecasts of the future consumption, long-term contracts, and investments in production and distribution,'' Russian Finance Minister Alexei Kudrin said Tuesday in Moscow, according to Itar-Tass news agency. "The entire process, from production through consumption, has an effect on the market."

In St. Petersburg, the G8 members are likely to deepen discussions, held at the April meeting of Group of Seven finance ministers and central bank governors in Washington, on how best to address global current account imbalances as part of talks on the shape of the world economy, which has posted solid growth despite persistent highs in oil prices.

The G-7 is the G-8 minus Russia.

"Global growth remains strong and is gradually becoming more broadly based," according to a draft of a joint statement to be issued after the St. Petersburg meeting. "However, downside risks from high and volatile energy prices and widening global imbalances remain."

Japanese Finance Minister Sadakazu Tanigaki said last week that the G8 members are likely to confirm that they will each tackle their own structural problems in fixing current account imbalances, without relying on exchange rate adjustments.

The G8 finance ministers "underline that global economic adjustment is a shared responsibility and confirm that the agreed policy strategy to address imbalances remains valid," the draft says.

Expert opinion

Halter Marek

02.12.06

Halter Marek
Le College de France
Olivier Giscard dEstaing

02.12.06

Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi

02.12.06

Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace

02.12.06

Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal

01.12.06

Peter I. Hajnal
Toronto University, G8 Research Group