G7: ready for further measures against energy shock

"We stand ready to take all necessary measures in close coordination with our partners, also to preserve the stability and security of the energy market. We recognise the importance of coordinated international action to mitigate adverse effects and safeguard macroeconomic stability". This was stated in a G7 communiqué after the meeting of governors and ministers of finance and energy, meeting in virtual format under the French presidency.

In the virtual meeting, convened to "assess the evolving situation in the Middle East and its implications for the energy markets, the global economy and financial stability", the G7 authorities "welcome" the decision of the members of the International Energy Agency (IEA) on 11 March to authorise the coordinated release of oil reserves. In addition, the finance and energy ministers will "consider the IEA's options to manage demand, depending on the circumstances of individual countries, in order to help stabilise market conditions and limit excessive volatility. In this context, we urge all countries to avoid imposing unjustified export restrictions on hydrocarbons and related products". The G7 central bankers, for their part, say they are "strongly committed to maintaining price stability, and ensuring the continued resilience of the financial system". The central banks assure that "monetary policy will remain data-dependent" and to this end they will "monitor closely inflationary pressures arising from energy and other commodity prices, inflation expectations and economic activity".

The G7 governors and ministers of finance and energy also emphasised "the importance of safe and uninterrupted trade flows, including safe navigation and protection of shipping lanes and infrastructure, as essential for global energy stability and security", referring to the situation in the Strait of Hormuz.

We need "a rapid, coordinated and proportionate political response" to the negative consequences on the economy caused by the crisis in the Middle East "bearing in mind the lessons of 2022-23" at the time of the Russian attack on Ukraine. This was stated by the Minister of Economy, Giancarlo Giorgetti, during his speech at the G7 Finance, Energy and Central Banks meeting. For Giorgetti, who focused above all on the increase in energy costs, "a critical problem for the energy-intensive industries that account for 20% of Italian manufacturing," "the energy measures to counter the indiscriminate rise in prices must be targeted, temporary, and based on a shared approach, bearing in mind the impact of the crisis in the various countries. Having said that,' he concluded, 'I agree with Christine Lagarde, we have to find the right mix between monetary and fiscal policy'.

"We reaffirm our unwavering support for Ukraine in the defence of its territorial integrity, its right to exist and its freedom, sovereignty and independence, and confirm our commitment to maintain pressure on Russia in order to achieve a just and lasting peace in Ukraine," the finance and energy ministers, as well as central bankers, of the G7 meeting under the French rotating presidency write further in the official communiqué.