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G7 leaders mull over global risks at summit

By Agencies In Iseshima, Japan | China Daily | Updated: 2016-05-27 07:40

Gathering begins as Abe escorts heads of states to the Shinto religion's holiest site, the Ise Grand Shrine

Group of Seven leaders voiced concern about emerging economies at a summit in Japan on Thursday as their host, Prime Minister Shinzo Abe, made a pointed comparison to the 2008 global financial crisis but not all his G7 partners appeared to agree.

The G7 leaders did agree on the need for flexible spending to spur world growth but the timing and amount depended on each country, Deputy Chief Cabinet Secretary Hiroshige Seko said, adding some countries saw no need for such spending.

The United Kingdom and Germany have been resisting calls for fiscal stimulus.

"G7 leaders voiced the view that emerging economies are in a severe situation, although there were views that the current economic situation is not a crisis," Seko said after the first day of a two-day G7 summit in IseShima.

Abe presented data showing global commodities prices fell 55 percent from June 2014 to January 2016, the same margin as from July 2008 to February 2009, after the collapse of the global financial services firm Lehman Brothers.

Lehman had been Wall Street's fourth-largest investment bank when it filed for Chapter 11 protection on Sept 15, 2008, making its bankruptcy by far the biggest in US history. Its failure triggered the global financial crisis.

Abe hopes, some political insiders say, to use a G7 statement on the global economy as cover for a domestic fiscal package including the possible delay of a rise in the nation's sales tax to 10 percent from 8 percent planned for next April.

Other summit topics include terrorism, cyber security and maritime security.

G7 leaders were rattled by Republican presidential candidate Donald Trump, US President Barack Obama said, adding Trump's statements displayed ignorance and were aimed at getting headlines, not what was needed to keep the US safe and the world on an even keel.

Shrine visit

Summit pageantry began when Abe escorted G7 leaders to the Shinto religion's holiest site, the Ise Grand Shrine in central Japan, dedicated to sun goddess Amaterasu Omikami, mythical ancestress of the emperor.

Abe has said he hopes the shrine visit will provide an insight to the heart of Japanese culture. Critics said he's catering to a conservative base that wants to put religion back in politics and revive traditional values.

On Wednesday night, Abe met Obama for talks dominated by the arrest of a US military base civilian worker in connection with the killing of a young woman on Japan's southern Okinawa island, reluctant host to the bulk of the US military in Japan.

The G7 groups the UK, Canada, France, Germany, Italy, Japan and the US.

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