Shinzo Abe points at 2008 crisis, others debate risk

Seven leaders on Thursday voiced concern about the emerging economies at the G7 summit in Japan even 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 told the reporters, adding that some countries saw no need for such spending.

Britain 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,” Mr Seko said after the first day of a two-day G7 summit in Ise-Shima, Japan.

Mr Abe presented data which showed that global commodities prices have dipped 55 per cent from June 2014 to January 2016, the same margin as from July 2008 to February 2009, after the Lehman collapse.

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.

Mr Abe reportedly hopes to use a G7 statement on the global economy as cover for a domestic fiscal package.