# Group of Seven (G7): Members, Functions, and Global Impact

![Group of Seven (G7): An intergovernmental organization made up of the world's largest developed economies that meets periodically to address international economic and monetary issues.](https://www.investopedia.com/thmb/mgbdFpRjwx9JbLQrzZL3gXHKTF4=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/G7_final-2883cac3bc9643ae8c3adbbe05c205c1.png)

*— Investopedia / Michela Buttignol*

> **Definition**
>
> The Group of Seven (G-7) is an organization that represents the world's largest developed economies and influences international economic and monetary issues.

## What Is the Group of Seven (G-7)?

The Group of Seven (G-7) is a global organization that meets to discuss economic and financial issues. Its members are France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. Government leaders of these countries meet periodically to address international economic and monetary issues, with each member taking over the presidency on a rotating basis.

The G-7 was, for a while, known as the [Group of Eight](https://www.investopedia.com/terms/g/g8.asp) (G-8), until 2014, when former member Russia was removed after annexing the region of Crimea illegally from Ukraine. The [European Union](https://www.investopedia.com/terms/e/europeanunion.asp) (EU) is sometimes considered to be a de facto eighth member of the G-7 since it holds all the rights and responsibilities of full members except to chair or host meetings.

The G-7 is non-legislative in nature, meaning it is not a governing body and cannot create or enforce any laws in member countries. However, the body creates initiatives for global issues that its members agree to abide by or strive for.

### Key Takeaways

*   The G-7 is an informal group of seven major developed economies, including the U.S., U.K., France, Germany, Italy, Canada, and Japan.
*   At one point, the group was called the G-8 before Russia was suspended in 2014 after it illegally annexed Crimea.
*   The G-7 focuses on addressing global economic challenges and financial crises through collaborative discussions and initiatives.
*   The group launched initiatives like the 1996 debt relief program for heavily indebted countries.
*   The G-7 initiated the Financial Stability Forum in 1999 to manage global financial systems.

## How the G-7 Functions and Impacts Global Economics

The main goal of the G-7 is to address [global issues](https://www.investopedia.com/terms/u/un-global-compact.asp), especially economic ones, and sometimes act together to solve them. Since its inception in the early 1970s, the group has discussed [financial crises](https://www.investopedia.com/terms/f/financial-crisis.asp), monetary systems, and major world crises, such as oil shortages.

The G-7 has also launched initiatives to fund issues and relieve crises where it sees an opportunity for joint action. Those efforts include several aimed at debt relief for developing nations.

In 1996, the G-7, with the [World Bank,](https://www.investopedia.com/terms/w/worldbank.asp) initiated a program for 42 poor countries, including a 2005 promise to cancel debts for those that completed it.

### $300 million

The amount of money the G-7 provided in 1997 to help contain the reactor meltdown at Chernobyl.

In 1999, the group also decided to get more directly involved in "managing the international monetary system" by creating the Financial Stability Forum (FSB). The FSB is made up of major national financial authorities, such as finance ministers, [central bankers](https://www.investopedia.com/articles/insights/082416/should-central-banks-be-independent.asp), and international financial bodies.

## The Evolution and History of the G-7

The G-7 began in the early 1970s when leaders from the U.S., U.K., France, West Germany, and Japan met in Paris to talk about the occurring [recession](https://www.investopedia.com/terms/r/recession.asp) and oil crisis. That, in turn, inspired French President Valéry Giscard d'Estaing to invite the leaders of those countries, plus Italy, to Rambouillet in 1975 for further discussions on global oil, this time with the country's leaders joining the finance ministers—an attendance roster that has endured. The next year, Canada was invited to join the group.

The G7 presidency rotates each year among these countries: France, U.S., U.K., Germany, Japan, Italy, and Canada.

### The Transition from G-7 to G-8 and Back

The G-7 has responded as the global economy has evolved, including when the Soviet Union pledged to create an economy with [freer markets](https://www.investopedia.com/terms/f/freemarket.asp) and held its first direct presidential election in 1991. Following a 1994 G-7 meeting in Naples, President Boris Yeltsin held meetings with G-7 member countries, in what became known as the P-8 (Political 8). In 1998, after urging from leaders including U.S. President Bill Clinton, Russia was added to the G-7 as a full member, creating a formal Group of Eight, or G-8.

The G-8 ended up being short-lived. In 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine. As of 2021, Russia has not been invited back to the G-7.

## Comparing the G-7 with the G-20: Structure and Influence

As developing nations began to represent a larger part of the global economy, the absence of a forum about international financial matters that included those [emerging economies](https://www.investopedia.com/terms/e/emergingmarketeconomy.asp) became more glaring.

In response, the [Group of 20](https://www.investopedia.com/terms/g/g-20.asp) (G-20) was created in 1999, comprising all the members of the G-7, plus 12 additional countries and the EU. As the economies and trade activity of markets such as China, Brazil, India, Mexico, and South Africa—all G-20 members—surge, many observers now see the G-20 as usurping much of the role and eminence once held by the G-7.

## Highlights and Outcomes of the 2021 G-7 Summit

From June 11 to June 13, 2021, the G7 met in Cornwall, England. According to statements released from the group, many of the discussions at the 2021 summit focused on two distinct issues: the ongoing coronavirus pandemic and the climate crisis. The G7 committed to distributing 1 billion vaccine doses over the next 12 months.

In response to the climate crisis, the group committed to the following actions: achieving net-zero carbon emissions by 2050, limiting the increase in global temperatures to 1.5 degrees, increasing and improving climate finance, and conserving at least 30% of our land and oceans by 2030.

## The Bottom Line

The role and purpose of the G-7 is as a forum for the world's most industrialized nations to address global economic and monetary issues. Its current member countries are the United States, the United Kingdom, France, Germany, Italy, Canada, and Japan.

The G-7's initiatives include debt relief for developing nations and financial crisis management, and its members collaborate on global challenges. The G-7 is a significant non-legislative entity that shapes global policy through discussions and agreements, but it lacks authoritative enforcement, relying on its members to support and implement its initiatives.

There are other similar global groups, such as the G-20; however, the G-20 includes emerging economies, which have different priorities and needs than more developed economies. The G-20 has become significant on the global stage as world leaders work to address issues such as climate change and inequality.

> **Article Sources**
>
> 1.  Council On Foreign Relations. "[Where Is The G7 Headed](https://www.cfr.org/backgrounder/where-g7-headed)?" Accessed Aug. 15, 2021.
>     
> 2.  International Monetary Fund. "[Factsheet-A Guide To Committees, Groups, And Clubs](https://www.imf.org/en/About/Factsheets/A-Guide-to-Committees-Groups-and-Clubs#G7)." Accessed Aug. 15, 2021.
>     
> 3.  International Monetary Fund. "[Multilateral Debt Relief Initiative — Questions and Answers](https://www.imf.org/external/np/exr/mdri/eng/index.htm)." Accessed Aug. 15, 2021.
>     
> 4.  European Bank For Reconstruction And Development. "[Chernobyl 25 Years On: New Safe Confinement And Spent Fuel Storage Facility](https://www.ebrd.com/documents/comms-and-bis/chernobyl-25-years-on.pdf)," Page 11. Accessed Aug. 15, 2021.
>     
> 5.  G7 Germany. "[G7 Summit](https://www.g7germany.de/Content/EN/StatischeSeiten/G7_elmau_en/texte_en/2014-11-05-geschichte-g8.html#:~:text=The%20G7%20was%20born%20as,consult%20on%20international%20economic%20policy.)." Accessed Aug. 15, 2021.
>     
> 6.  Government of Canada. "[Canada and the G7](https://www.international.gc.ca/world-monde/international_relations-relations_internationales/g7/index.aspx?lang=eng)." Accessed Aug, 15, 2021.
>     
> 7.  U.S. Department Of State. "[About the G8](https://2009-2017.state.gov/e/eb/ecosum/2012g8/about/index.htm)." Accessed Aug. 15, 2021.
>     
> 8.  G7. "[Summary of Carbis Bay G7 Summit](https://www.g7uk.org/wp-content/uploads/2021/06/Summary-of-Carbis-Bay-G7-Summit-Communique-PDF-248KB-2-Pages.pdf)." Accessed Aug. 15, 2021.