In a bid to remain relevant, the Group of Seven industrialized countries is getting back to basics.
Recognizing that the Group of 20 developed countries and emerging markets is now the main forum for co-ordinating economic policy, Finance Minister Jim Flaherty will scrap the tradition of issuing a final statement when he hosts U.S. Treasury Secretary Tim Geithner, European Central Bank President Jean-Claude Trichet and other G7 finance ministers and central bank chiefs in Iqaluit next month.
The seemingly mundane decision to forgo a communiqué actually represents a significant shift for the G7, which has met in an attempt to guide the global economy since the late 1970's.
The G7 statements, no matter how oblique or nuanced or repetitive, were closely watched for clues on the relative comfort of governments and central banks with the state of the economy and markets.
But the financial crisis showed the G7 - the United States, Japan, Germany, Britain, France, Italy and Canada - had lost much of its ability to effect change.
The economies of countries such as China, India and Brazil had grown so large that the United States, Britain and the other members of the G7 couldn't stop last year's economic calamity without their help. The importance of the emerging markets has only been enhanced as those countries lead the global recovery.
Still, the insistence of the G7 to continue meeting was creating some doubt about the willingness of the older powers to share control.
Mr. Flaherty's plans for an informal gathering in Iqaluit, explained by Finance officials in a briefing yesterday, suggest Canada, which assumed the G7 presidency this year, is willing to allow the spotlight to shift to the larger group.
The absence of a defined G7 position will give the G20 the final word on the global economy, allowing the G7 countries to continue a club that has existed for three decades without creating confusion about who is running the global economy: the G20, as leaders said it would when they met in Pittsburgh last year, takes over as the de facto steering committee of the global economy; the G7 becomes a caucus that will seek to influence the larger group from within.
The decision might even reduce tensions in the G20 by toning down disagreements within the group, such as the long-standing dispute between G7 members and China over the Asia's nation's insistence on controlling the value of its currency.
"If there's no communiqué, you can't be seen to be ganging up on China," said Andrew Cooper, an associate director and distinguished fellow at the Waterloo, Ont.-based Centre for International Governance Innovation. "This is getting back to what the G7 used to be, with a small, focused agenda."
The G7 has its roots in informal meetings of the industrialized powers in the early 1970's. The first leaders' summit occurred in Rambouillet, France, in 1975 and included the United States, Japan, Germany, Britain, France and Italy. Canada joined the following year.
Things started to blur in the 1990's. The G7 invited Russia to join the club in 1998, although finance ministers and central bankers never actually granted their Russian counterparts official status at their meetings. In 1999, the G20 was assembled as forum for finance chiefs. In 2003, the G7 began inviting Brazil, China, India, Mexico and South Africa as guests.
Mr. Flaherty is doing away with all that. Russia wasn't invited to Iqaluit, nor were any of the big emerging markets.
Mr. Flaherty believes more can be accomplished by allowing officials from seven countries with a long history of co-operation to debate issues such as financial regulation and government frankly and without distraction.
Ministers and central bankers will gather for dinner on Feb. 6, and conclude by about noon the next day.
"We're going back to the G7 finance ministers, central bankers' tradition, the roots of the G7," Mr. Flaherty told reporters in Toronto last week.
"Fireside chats, no ties, informal conversations where we can actually deal with issues without being so concerned about what's going to be put in the communiqué in paragraph six or paragraph seven and deal with some of the important issues."