Vitamin 'B7' for the G7

The next summit of the G7 leading western industrial nations - Germany, France, Britain, Italy, Japan, Canada and the US - is scheduled to take place in Bavaria next month. Reason enough for presidents of the largest business and industry assoications - known as the B7 - to get together in Berlin to map out their interests. After all, the seven largest industrial nations jointly produce 46 percent of the global GDP,and generate 35 percent of global trade.

The basic mood was good, says Ulrich Grillo, President of the German Industry Association, BDI. The world's business heavyweights are well-aware of the role they play for the prosperity of their countries, but it also makes them susceptible to global crises.

The world isn't as safe as it used to be, Grillo said. "This year, the international community faces unprecedented political, social, economic, and environmental challenges, from bilateral conflicts to terrorism and social instability to new security threats."

Russia is out

The B7 also discussed Russia with German Foreign Minister Frank-Walter Steinmeier. "Of course, German industry would like to reduce the sanctions again and get back to a G8 and a B8," Grillo said. "But it would be wrong to unilaterally cancel the sanctions." First, basic conditions must be fulfilled, he added; after all, the sanctions were imposed as a result of Russian violations of international law.

He always held the view that long-term legal security was more important than short-term profit, the head of the BDI said. Quoting Steinmeier, Grillo added that progress concerning the implementation of the Minsk accord on a ceasefire in eastern Ukraine had been made and that continuing the implementation of the accord was the right move.

Recommendations for the G7

Presumably, it will be a while before Russia will be allowed back to the table. "We share many core values and principles, including democracy, the rule of law, respect for human rights, freedom and openness, as well as the belief in the market economy," Grillo said, summarizing the basic principles that link the G7 states. Based on these principles, the G7 is "indispensable" in shaping the global agenda, he stressed.

The B7 presented a communiqué with suggestions on how to do so, a 21-page paper entitled "Industrial Innovation for a Sustainable World". The group's recommendations include the sustainability of global supply chains, energy and climate policies, efficient use of resources and health policies.

The G7, according to the B7 industry federations, must initiate ambitious reforms to boost growth. Even if the global economy has stabilized after the financial crisis, "there is no reason to sit back and do nothing." Obstacles to investments must be removed, Grillo said, adding that it is essential that conditions for competiveness be harmonized.

Trade and energy

The B7 groups expressed thier concern that free world trade is in danger: "The B7 regrets that protectionist trends are still on the rise." Free Trade Agreements are the only solution, the B7 says. The seven business associations unequivocally back the TTIP agreement between the US and Europe, arguing that cutting what currently amounts to customs duties of some $10 billion on transatlantic trade will benefit all parties involved. They also demand a speedy implementation of the WTO Agreement on facilitating trade.

BDI President Grillo made it clear that the debate about safe, affordable and clean energy should be on the global agenda, adding that it cannot be purely a national or a European debate. All parties involved must make "comparable, ambitious and verifiable contributions." If nations simply follow their own agenda, he warned, they will only be burdening business and industry.

The importance of fossil fuels

Clearly, the business federations want to have a say on any agreement made at the UN climate summit later this year in Paris. A climate deal is an important task for the state, Grillo said, but added that industry leaders are convinced that economic expertise will be necessary to actually reach the goals. After all, he explained, more often than not, it is the companies that must implement energy and climate policy measures.

The business federations also left no room for doubt that they will not stand for anyone ruining the energy business of coal, gas and oil.

"Climate change efforts should target efficiency improvements, new technologies, and demand-side factors, while not restricting the ability of companies to responsibly extract fossil fuels or deliver them to the market," the B7 communiqué says.