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Johnson Urges Avoiding Errors of Previous Recoveries: G-7 Update

·12 min read
Johnson Urges Avoiding Errors of Previous Recoveries: G-7 Update

(Bloomberg) -- Prime Minister Boris Johnson welcomed fellow Group of Seven leaders along the English coast, kicking off three days of summitry after meeting U.S. President Joe Biden for the first time on Thursday.

The first order of business will be the economic recovery as the world’s most-developed nations discuss ways out of the pandemic even as the number of cases is rising worryingly in the U.K. Also look for signs of whether Brexit-related tensions will flare up in meetings on the side.

Key Developments:

Johnson and Biden put Brexit differences on iceMerkel invited to visit White House before she leaves officeFamily photo took place along a stretch of sandy beach

U.S. encourages U.K. to resolve EU spat over N. Ireland (6:36 p.m.)

The White House sounded a note of patience with the U.K. amid its bitter Brexit dispute over EU trade with Northern Ireland.

“We certainly recognize that there’s ongoing negotiations between the UK and the EU,” Amanda Sloat, the National Security Council’s senior director for Europe, said in an interview on Bloomberg Television. “And certainly continue to encourage them to continue to work through implementation of the modalities of these in a way that promotes political and economic stability and prosperity in Northern Ireland.” -- Jennifer Jacobs

Macron to meet Biden for Saturday bilateral (4:06 p.m.)

Emmanuel Macron will meet Biden on Saturday morning for their first in-person, one-on-one meeting, after a cozy embrace Friday, when the French president put his arm around his U.S. counterpart while they were walking -- two years after Macron’s famously firm handshake with Trump.

When asked why Biden and Macron were laughing so hard on their way to the G-7, a Macron aide said they were discussing how to make democracies more efficient for middle classes and how to avoid a confrontation with China while defending common values and interests.

The French leader has been keen to praise Biden’s return to the Paris climate accord and his overall re-engagement with Europe. But he has also taken veiled jabs at the U.S. president by highlighting the shortcomings of some of Washington’s recent proposals, such as lifting intellectual property patents on Covid vaccines. -- Ania Nussbaum

Johnson urges avoiding errors of previous recoveries (3:30 p.m.)

Johnson kicked off the first session of the summit by asking his fellow leaders not to repeat mistakes from prior crises where the economic recovery was uneven and urging G-7 nations to focus on building back greener and more equal.“We need to make sure that we don’t repeat some of the errors that we doubtless made in the course of the last 18 months or so,” Johnson said. “I think there is the potential to generate many, many millions of high-wage, high-skill jobs.”

Johnson said people want to see that countries are working on “building back better,” repeating a slogan he employs frequently.

“And building back greener and building back fairer and building back more equal and how shall I -- more gender neutral, in perhaps a more feminine way, how about that, apart from anything else,” he said. -- Jenny Leonard and Jennifer Jacobs

Family Photo reveals personal dynamics (2:51 p.m.)

Johnson greeted his colleagues on a light wooden boardwalk on the raked sands of Carbis Bay. He wore a charcoal suit and light blue tie. Carrie Johnson wore a hot pink mid-length dress.

The pair welcomed leaders and some of their partners with elbow bumps and quips. Jill Biden joked: “I feel like we are at a wedding”. Later Johnson joked that it was like “walking down the aisle.”

Biden urged assembled media to go swimming, quipping “everyone in the water.” Reporters asked him what his message would be to Vladimir Putin who he is meeting June 16 and he replied “I’ll tell you after I have delivered it.”

It turned out Carrie Johnson had spotted Canadian Prime Minister Justin Trudeau swimming in the sea earlier on Friday morning. Johnson also went swimming earlier.

After the family photo of leaders, Merkel urged Johnson ahead, telling him “you are the leader.” But as Johnson pressed ahead, Macron took the opportunity to throw his arm around Biden’s shoulders and begin an animated discussion. His remarks were inaudible. -- Kitty Donaldson

G-7 protesters dress up as jellyfish (2:34 p.m.)

As leaders prepared to gather on the beach for the formal start of the summit, several hundred climate protesters marched through the center of St Ives nearby. Beating drums, singing and chanting, some were dressed as jellyfish, while others held placards saying, “drowning in promises,” and calling on the G-7 to prioritise climate action. The peaceful demonstration snaked through the narrow stone streets of the town, along the harbour front and onto the beach. -- Tim Ross

China’s top diplomat reaches out to Blinken (2:32 p.m.)

In interesting timing, China’s top diplomat spoke today with U.S counterpart Antony Blinken over the phone, calling for dialogue and cooperation between the countries. Yang Jiechi also urged the U.S. to tread carefully on Taiwan and avoid politicizing inquiries into the origins of the pandemic, according to a readout on China state TV. It’s their first interaction since a testy in-person meeting in March in Alaska, and comes as G-7 leaders start their talks in Cornwall, where the topic of managing China’s growing clout will be high on the list. -- Rosalind Mathieson

Merkel Underscores Importance of Global Vaccination (2 p.m.)

Merkel said world leaders want to show they are not just focused on their own countries but also want to ensure everyone has a chance to get a Covid-19 vaccine, especially in countries like Africa. On arrival in Cornwall, she also told reporters that Biden’s presence is important as he represents an “affirmation of multilateralism that we’ve missed in recent years.” The G-7 will make a “strong statement” in favor of values-based multilateralism that will inevitably put the group in conflict with nations like Russia and China, she added.

“On the other hand, we need everyone in the world, and want to work together especially on climate protection and biodiversity,” she said. “We’ll never get solutions there without involving China.” -- Iain Rogers

As Johnson plays host, U.K. virus numbers rising (12:13 p.m.)

The shadow of the pandemic has loomed large over this summit. The big fear going in was whether the meeting could go ahead, with the U.K. government keeping a close eye on the number of infections. Over the past few days they’ve been getting significantly worse.

Data released Friday by the Office for National Statistics showed an estimated 1 in 560 people in England had the virus in the week to June 4, up from 1 in 640 a week earlier and 1 in 1,340 in the week through May 8. The summit ends Sunday and on Monday Johnson has to make a decision on whether to proceed with the final stage of reopening the economy later this month.

The question is whether he can afford to wait that long to make that call. He’s faced criticism in the past for not acting quickly enough in response to spiking cases so this time he can’t afford another misstep. -- Flavia Krause-Jackson

Merkel to visit Biden in U.S. on July 15 (12:05 p.m.)

Merkel will visit the U.S. and meet with Biden on July 15, the White House announced Friday. The visit -- where the leaders will discuss issues including the Covid-19 pandemic and climate change -- comes amid tensions over the disputed Nord Stream 2 gas pipeline.

Nord Stream 2, which will carry Russian natural gas to Germany, is beginning some testing operations on Friday, just days after the U.S. government acknowledged the project would be completed despite efforts to block it. The U.S. is now working with Germany to limit how dependent Europe’s energy system will be on Russia after the pipeline is completed, according to U.S. Secretary of State Antony Blinken. -- Kevin Whitelaw

Read more: Biden to Host Merkel at White House Amid Spat Over Gas Pipeline

Poland chides Biden for snubbing Eastern Europe (11:55 a.m.)

Poland’s Foreign Minister Zbigniew Rau criticized Biden for not meeting NATO allies in Eastern Europe during his first foreign trip, and for waiving sanctions on the Nord Stream 2 gas link, which Poland opposes.

“Sadly, the U.S. delegation coming to Europe, led by President Joe Biden, is so busy with his meeting with President Putin that it has not found time to organize meetings with allies on the eastern flank,” Rau told Polish daily Rzeczpospolita in comments published on Friday. He said the White House didn’t consult its Nord Stream 2 decision with “the region that is most affected” by the Russian-German gas pipeline project.

Poland’s government considered itself a close ally of Donald Trump and relations have cooled since Biden took office. -- Wojciech Moskwa

EU’s Michel urges reassessment on China (10:32 a.m.)

Charles Michel, head of the European Council, said countries need “to rebalance the economic relationships” with China.

“We observe that there is lack of reciprocity at the economic level, we are observing also unacceptable trade practices by China,” Michel told Bloomberg Television’s Guy Johnson.

Michel stressed the importance at the same time of working with the economic giant. “We need to engage with China on some global topics – Covid-19, health, these are topics for which a dialogue is useful and necessary with China included,” he said. Strong ties between the U.S., Europe and other like-minded countries are key “to have more influence and to try to push China into a more positive behavior.” -- John Follain

What the world wants China to disclose in Wuhan lab leak probe (10:25 a.m.)

G-7 leaders are set to call for a fresh, transparent, World Health Organization-convened study into the origins of this virus, according to the draft communique seen by Bloomberg News. Yet so far they’ve been vague on what exactly they want, and what they feel China failed to disclose.

Click here to read what a new study could examine, including details on the Wuhan lab’s research, medical records of lab workers and more data on early cases -- Rosalind Mathieson

Investors push G-7 leaders on climate change disclosures (10:18 a.m.)

The Investment Association Chief Executive Officer Chris Cummings urged the G-7 to encourage firms to beef up climate-risk disclosure. The U.K. trade body, which represents firms managing 8.5 trillion pounds ($12 trillion) in assets, wrote to officials ahead of the summit, saying the investment industry has a major role to play that requires global coordination, common data and reporting standards and a transition plan.

“Work with us as an industry to make sure that each major economy mandates the safety requirements, that we can really push ahead to make sure that the investment decisions we make, make sense in this climate-change challenge that we are all facing,” Cummings told Bloomberg TV. -- Nishant Kumar

U.K. blames EU for ‘dogmatic’ approach on N. Ireland (8:54 a.m.)

U.K. Foreign Secretary Dominic Raab blamed the European Union for the delay in resolving issues on the Northern Ireland protocol. He told Sky News that Johnson and Biden didn’t “linger” on the issue during their meeting yesterday.

“The prime minister wanted to raise it and be very clear on our position,” Raab said. “It is the dogmatic, purist approach that the EU has taken which is the risk to the Good Friday Agreement.”

He added that “the ball is very much in the EU’s court” as to whether the issues will be resolved before the end of June. -- Kitty Donaldson

Merkel’s arrival marred by virus case (8:20 a.m.)

After several Covid-19 infections surfaced in a hotel in St. Ives, one member of the German exploratory delegation has precautionarily gone into quarantine, German Chancellor Angela Merkel’s office confirmed. Officials were at pains to stress that it would not affect the chancellor’s trip. She is due late morning, in time for the family photo. -- Arne Delfs

U.K.-U.S. relationship has been reframed (8 a.m.)

There was a fair bit of anticipation about how Johnson and Biden would get on and indeed if they would hit it off. Ahead of the meeting, there were concerns that Johnson was in for a scolding on Northern Ireland, but that did not materialize. There are still real differences over how Brexit is unfolding but both leaders put on a good show and have a lot of shared goals, from climate to security.

Johnson admitted he dislikes the term “special relationship,” often overused and overplayed to describe the transatlantic chemistry that some former presidents and British prime ministers shared. -- Flavia Krause-Jackson

White House’s fact sheet on taxes (7:55 a.m.)

The White House announced Friday morning that the U.S.-brokered tax agreement would be a focus of Biden’s meetings at the G-7, calling it “a critical step towards ending the decades-long race to the bottom that pushes nations to compete over who can offer the lowest tax rate to large corporations at the expense of protecting workers, investing in infrastructure, and growing the middle class.”

Treasury Secretary Janet Yellen played a key role in brokering the landmark deal, which G-7 finance ministers sealed last weekend in London. Still, a final, global deal remains a long way off. Talks will continue next month, when Italy hosts Yellen and colleagues for a Group of 20 meeting. Any accord must also have support from a majority of about 140 nations involved in negotiations under the Organization for Economic Cooperation and Development. -- Kate Hunter

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