G7 Finance Chiefs Worried over Impacts of Middle East Crisis

Paris, May 19 (Jiji Press)–Finance ministers and top central bankers from the Group of Seven major industrialized nations expressed their concerns Tuesday over the impacts of the prolonged Middle East crisis. “We acknowledge that global economic uncertainty has heightened risks to growth and to inflation amid the ongoing conflict in the Middle East,” the officials from Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union said in a joint statement adopted at their two-day meeting in Paris through the day. “A swift return to free and safe transit through the Strait of Hormuz and a lasting resolution to the conflict are imperative” to mitigate these negative impacts, the statement added. The officials agreed to promote efforts to address risks of cyberattacks that use advanced artificial intelligence models, saying that an expert group of the G7 will “enhance information sharing and identify best practices.” The G7 nations will come up with specific countermeasures against such cyberattacks in the run-up to their summit in June, after U.S. startup Anthropic developed Claude Mythos, a cutting-edge AI model highly capable of identifying vulnerabilities in systems. From Japan, Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda took part in the Paris meeting. At a press conference after the meeting, Katayama mentioned risks related to the Middle East situation, saying that she is particularly keeping a close watch on the impact on Asia, which relies on the region for crude oil and liquefied natural gas. French finance minister Roland Lescure, who chaired the meeting, told the press that the ongoing crisis has illustrated the need for continued international dialogue in the current divided world. On rare earths and other critical minerals, the G7 officials said they “remain concerned about…arbitrary export restrictions by third countries that disrupt global supply chains,” apparently having China in mind. They said the G7 nations intend to deepen their cooperation with like-minded countries to “strengthen secure, durable and resilient supply chains, including through increased investment, recycling measures and the adoption of sound sourcing standards.” At a time when long-term interest rates in Japan, the United States and Europe are rising rapidly amid heightened inflationary concerns reflecting higher energy prices caused by the Middle East crisis, central banks are “strongly committed to maintaining price stability and to ensuring the continued resilience of the financial system,” the officials said. They voiced concern that supply disruptions for fertilizers due to the Middle East tensions could lead to food crises that affect “the most vulnerable countries.” The finance and central bank chiefs reaffirmed the view that excess volatility and disorderly movements in foreign exchange rates can have adverse implications for economic and financial instability. END [Copyright The Jiji Press, Ltd.]