1975 november 15-17: rambouillet
The inception of the Group of Seven (G7) summits is usually viewed as a French initiative, the inspiration of President Valery Giscard D'Estaing, rooted in his experience of international financial diplomacy in the turbulent early 1970s. In April 1973 the finance ministers of the US, Britain, France and Germany quietly met for a discussion in the White House Library, and so began a series of very informal and private sessions usually held without papers or retinues of officials. With deliberate blandness and opacity its members dubbed this institution the "Library Group". (The Japanese later joined and it eventually became known as the G5.)
Giscard was elected French President in May 1974. The mid-70s were perhaps the zenith of French post-war influence and Giscard's diplomacy in the early years of his seven year Presidency (1974-81) was confident and effective: certainly he was the first publicly to float the idea of a library-style summit between heads of government, raising it during a conversation with American journalists in July 1975 when he argued that currency stability was essential to economic recovery in the West. The French were campaigning to persuade the Americans to return to a fixed parity exchange rate system of the kind that had existed before 1971 under the Bretton Woods Agreement, with central banks committed to intervene in defence of the rate. (Of course, such a system would not have been based on the dollar, as Bretton Woods had been, if they had had their way.) Strong domestic forces were in play, unemployment in France approaching one million and most of the other participating countries experiencing economic difficulties, Britain very much to the fore.
In several respects the role of Giscard and the "Library Group" in influencing modern summitry has perhaps been overstated. Heads of government could not hope for the degree of privacy available to finance ministers and as a result the G7 has never functioned remotely like the G5. Further, the British records show that the West German Chancellor, Helmut Schmidt, and US President, Gerald Ford, also played their part in forming the G7. Following discussions at a four power lunch during the Helsinki Conference on 31 July, Schmidt drafted a paper for Henry Kissinger (a copy of which was handed to the British) laying out a programme of work for such a meeting, making international reflation the core objective. Ford had already endorsed the proposal after discussions with the German Chancellor a few days before. The French attachment to fixed parities was not a popular one and the British, Germans and Americans converged on the view that the summit should only take place on a wider agenda. Finally, most important of all, the files suggest that no one intended or expected Rambouillet to be an annual event, the first in a series still running. In fact both Giscard and Schmidt seem to have been far from keen that the summit become the international institution it now is.
Some familiar features of later summits were there from the first, however, such as the careful advance preparation of summit conclusions by emissaries close to heads of government, not all of them officials (later called the "sherpas", here known as the Carlton Group from the name of the New York hotel at which they first met). Their role was to ensure that something of substance would be seen to emerge from the summit, because a meeting at head of government level could not take place without concrete results to show, on pain of collective loss of face. And one encounters at Rambouillet also one of the G7's enduring characteristics, an insoluble conflict between a desire to keep numbers small and the determination of states and individuals to be invited to a prestigious gathering. Giscard aspired to create the elusive country house atmosphere at the small Château de Rambouillet 30 miles south west of Paris, proposing to invite the heads of government of five states: the US, Japan, Germany, France and Britain. He immediately met with irresistible pressure from Italy to add its name, and of course foreign and finance ministers clamoured for a place too, with success. He hoped to keep officials at bay, but "the mandarins were compressed rather than suppressed" (as the British Ambassador put it). The host's honour was saved, though: he arranged to billet all but the heads of government at an inconvenient distance from the Château and loftily excluded Canada altogether.
The French did not achieve their largest objective at the summit, having to settle for a declaration of common interest in exchange rate stability. But this was reckoned a significant diplomatic achievement all the same, and a notable step towards the more constructive French approach to the US which Giscard advocated.
Economic weakness left the British in a poor position at the summit: the prospect of future crisis left UK Ministers playing a defensive hand designed to keep open the option of introducing selective import controls. Indeed, an on the record statement to that effect was made unilaterally by the Prime Minister to British journalists immediately following the summit, and the line was greeted with foreboding by the French and Germans. But the records do not suggest perhaps that participants saw much risk, in the short-term at least, of a return to full-scale protectionism.
Each participant had been allowed to table one item for the agenda. Session Four was an informal one, without agenda or notetakers; the British memorandum is based on personal notes by Prime Minister Harold Wilson.
1976 june 27-28: puerto rico
One of the conclusions of Rambouillet had been that such summits should not be 'institutionalised'. Repetition was not ruled out, but it was a surprise, all the same, when less than six months later the Americans proposed a second meeting, Kissinger quietly raising it with the British Foreign Secretary on 24 April, and suggesting a very early date (late June). European leaders immediately suspected that President Ford was playing to his domestic audience in presidential election year, noting that Ronald Reagan was gaining ground in the Republican primaries. Responses were cool, in London almost as much as in Paris or Bonn, and the initiative was seen as clumsy.
The US quickly forced the issue, Ford sending messages to other leaders commending the idea and asking them to see a personal emissary, George Shultz (who had been the US Sherpa for Rambouillet). Meeting Jim Callaghan, the newly-appointed British Prime Minister, on 10 May, Shultz stressed US worries about the situation in Italy, where the communist PCI was widely expected to enter government following elections on 20 June. Such an approach was well-chosen, because we were already discussing a programme of official and non-official warnings to Italy in the hope of forestalling this outcome, and the French and Germans certainly shared our concern. Told that Ford envisaged a venue in the US, Callaghan made reference to November's election and commented that he would make the trip there, "but without enthusiasm". Puerto Rico eventually emerged as the destination because it fell within US jurisdiction, but as a self-governing territory had no say in the choice of president.
Part of the hesitation on the British side resulted from the angry reaction of smaller countries to their exclusion from Rambouillet: summitry of this kind had a diplomatic price, particularly within the European Community where, for example, we were relying on the Belgians to sponsor a compromise proposal on direct elections to the European Parliament. The FCO wanted us to urge the Americans to invite the President of the European Council - as luck would have it, from the smallest country of all, Luxembourg - but No.10 would have none of it. The Americans told us in fact that they would invite a Community representative if all member states demanded it, perhaps calculating that the stipulation was unlikely to be met. In the end, after much discussion, the Community went unrepresented, largely due to French objections. At least it was clear that Canada would attend this time, the Americans insisting that they had only agreed to attend Rambouillet on the condition that it was included in future.
Callaghan began to warm to the summit proposal after several long conversations with the West German Chancellor, Helmut Schmidt, an increasingly trusted political ally and friend who had his own election to face and hoped for a summit dividend. The Italian factor faded for a while as the polls gave comfort that the PCI was falling back, but that may actually have eased the way, because it was proving difficult to agree how the summit should seek to influence the internal politics of a participating state. By 21 May, at a meeting of foreign ministers in Norway, the deal was done, the US, Britain, France and Germany agreeing in principle to a second Rambouillet. Canada, Italy and Japan were to be invited afterwards, effectively defining them as second tier members. News that a summit was to be held leaked (in Washington) on 20 May, before the wording of an official announcement had even been discussed.
When the Sherpas met in mid-June to consider summit procedure and a possible communiqué it became apparent that the Americans had in mind a very short meeting, with only two working sessions, the US, UK, France and Germany secretly assembling at some point to consider the Italian situation (a difficult manoeuvre). Reviewing summit preparations together in London a ten days later, in irony-laden exchange, Giscard and Callaghan agreed "that the only valuable meetings were the types of meeting which could never take place, namely those between the four of us". Giscard was keen that the final communiqué should not leave the impression that these summits were to become regular features of the international scene.
In the event there were three sessions, and the four-power discussion of the Italian situation - disguised as a "quadripartite meeting" on Berlin - was a secret to none of the summit participants, the Italians included. (In fact the PCI had failed to make the feared breakthrough in the recent election, though a senior Italian official sought out an irritated British PM at his summit villa to offer the view that there would probably be a Communist Government "within about five years under a Western umbrella".) The opening session records the important point that the economic background to Puerto Rico was one of robust recovery, with G7 members expected to exceed 4.25 per cent growth that year, an additional reason why the summit seemed of less moment than Rambouillet and its successors.
Callaghan seems to have had only one bilateral at Puerto Rico, a sensitive meeting with President Ford on the first morning of the summit. The Prime Minister mounted a defence of British economic policy and asked for "encouragement, even a little praise, for what we have achieved" so as to strengthen his hand domestically. These remarks were evidently aimed at Bill Simon, US Treasury Secretary, who had been publicly critical of British performance. In private Ford and his White House advisers were hardly less so, as can be seen from Ford Library papers elsewhere on this site.
1977 may 7-8: london
President Ford's defeat by Jimmy Carter in the November 1976 US election helped to trigger the next summit, European leaders being keen to draw the popular new incumbent across the Atlantic and sun themselves in a little reflective glory, as well as establish good working relations. Giscard was the first publicly to make the suggestion, musing that London or "the English countryside" would be the right venue. Arguably the renewal of French commitment was a significant step towards institutionalising the summit.
There had already been repeated Japanese bids for the honour of hosting, but British ministers joyfully batted them aside with the aid of this helpful intervention from Paris. It helped too that Britain's six month presidency of the European Council began in January 1977, allowing Callaghan to press his claims for an early visit to Washington and giving him a better chance of finessing the difficult issue of Community representation at the summit. An upcoming NATO meeting in London could also be dovetailed with it. Messages were sent to President-elect Carter, who - while unable to offer or accept formal invitations till he assumed office - gave a cautiously positive response in a phone conversation with the PM a week before the inauguration. The deal was firmed up during a follow-up visit to Europe by the new Vice-President, Walter Mondale.
Gratifyingly from the British point of view it also became apparent that the Americans were keen to hold another unpublicised quadripartite meeting in the fringes, focussing on the big political and defence questions, an idea also popular with the French and Germans. These semi-secret events - the first being Helsinki in 1975 - looked set to become a fixture alongside the increasingly-publicised seven state summits, even achieving a certain priority. The first meeting of Sherpas, in Washington on 11 March, was confined to the four powers.
But after this charmed start, Callaghan's luck ran out. The US irritated the Germans and French by pressing that human rights, arms sales and nuclear non-proliferation feature on the main summit agenda, a proposal refuting the notion that this was a purely "Economic Summit" - as the press had begun to call it - and putting the British on the spot. We favoured the US position and in the end nuclear proliferation was discussed during the summit, at some length, generating negative headlines when an agreement to differ was the only result. Callaghan sang Carter's praises to Schmidt at every opportunity, but their relationship began badly and then got worse.
And whether the European Community should be represented or not - and precisely how (if it was) - absorbed a remarkable amount of time and energy, bringing the PM into uncomfortable contact with the new President of the European Commission, his former close colleague, political rival and bête noire, Roy Jenkins. Our strategy was to invite the Community to reach a consensus on what it wanted in the way of representation, none being likely to emerge. The Americans told Callaghan they had no problem with the Community being there - pointedly President Carter gave Jenkins an hour of his time in Washington on 18 April - but the French were deeply resistant, and Callaghan himself privately told officials he hoped he could "get away" with leaving the Community out. Diplomatic bloodshed followed, culminating in what the PM called "a long and ridiculous argument" over dinner at the Rome European Council on 25 March in which almost everyone lost their temper. The final, unhappy compromise left Jenkins in attendance, but not as a full or equal participant.
Partly as a result of these side-issues, high political consideration of what might actually be done at the summit was distinctly lacking till April, by which time it was really too late to hope for any substantial agreement. Schmidt gave the British and US a lengthy German "non-paper" in early March, but we read this less as a manifesto than an attempt to deflect pressure on Germany to reflate its economy, "a little defensive but also self-righteous. The Germans have done their bit" (in the words of a senior British official). Callaghan had publicly commented that the world economy faced the deepest recession for 40 years, but in truth what could the summiteers do? Looking back at it all the following year, chatting to Carter, he admitted that they had come up with targets and promises amounting to not very much. As late as 2 May, less than a week before the leaders arrived, Bernard Donoughue's diary records senior ministers asking themselves what message they hoped the summit would send? "Keynesianism has failed", suggested the Chancellor of the Exchequer.
The summit began a little uneasily with an informal dinner at No.10 on Friday 6 May, an event marred by Giscard's refusal to attend - in protest at the presence of Jenkins - and Jenkins's objection to the seating plan, which left him off the top table (Donoughue, a political admirer and fellow-diner, commented of the latter: "His appearance of continually injured dignity is not good for him".) But things improved, and in one respect perhaps there was a solid success. No.10 provided the kind of intimate atmosphere always desired for these occasions (though rarely achieved), a chance for powerful people to talk directly between themselves and take each other's measure. On the Saturday morning the leaders were locked in the State Dining Room, their delegations waiting by, uncalled, the building remarkably quiet. At lunch the leaders strolled across St James's Park to Lancaster House (generating some good photos), an initiative repeated on the Sunday when they walked from No.10 to the Banqueting House for the closing press conference, gestures of informality progressively harder to contrive in later years. The quadripartite meeting was held on the Monday in the even more intimate surroundings of the White Room at No.10, no officials being present at all.
1978 july 16-17: bonn
The fourth summit in the series was held in Bonn. The international background was of deepening economic difficulty, commonly attributed to "global imbalances" and a falling dollar (although this was a slowing international economy, not a recessionary one, with US growth still expected to be 4 per cent and Japanese around 5). The summit location was helpful from the British and US point of view because both wanted Germany to reflate and holding the event on home soil predisposed the Germans to be helpful, so as to be able to claim a diplomatic success. The huge and growing Japanese trade surplus put them a close second in the firing line, and they received some rough handling along the way, but leverage proved limited, in part because Tokyo was not the venue . It was no accident that the G7 went east the following year.
The British played a part in setting up the essential deal - a German fiscal boost of up to 1 per cent, in return for US moves to discourage energy consumption by raising domestic oil prices to world levels by 1980 - but economic weakness made us marginal to the outcome, beyond establishing modalities and easing the chronically strained Carter-Schmidt relationship, Prime Minister Callaghan standing well with both men. In the end the chief policy role assigned us was the limited one of disavowing protectionism, an area where the US and Germans thought us backsliders, in company with the French. This was a somewhat humiliating perception, but not entirely misplaced. In fact at that very moment the British Foreign Secretary of the day, David Owen, was energetically prompting his officials to prepare a full-scale protectionist programme for Europe, in addition to measures already taken. (He did not get far: the PM was unimpressed.)
The Callaghan government had only a year to run before it was compelled to face the electorate (with October a likely date for the poll), so had a strong interest in brokering reflation. Of course, the US and the German Governments were directly in touch as well. A paper in the Carter Library (available on this site) show that the outlines of a deal had been traced, unknown to London, at a meeting between the US sherpa, Henry Owen, and Helmut Schmidt in early April.
But while a deal was in the offing on reflation and energy, British ideas on a new regime for exchange rates - hinting at a desire to return to a more managed, international regime (or so at least the Americans thought), with an enhanced role for SDRs - found no takers in the US or Europe. The US Administration was strongly committed to a floating rate, and it cannot have helped when Callaghan rather tactlessly observed to Carter (in their meeting of 23 March) that the dollar in the seventies resembled sterling a decade before. Germany and France, on the other hand, were looking in another direction entirely, and making their own plans. At a private dinner in the Federal Chancellery on 12 March Schmidt told Callaghan that he was pursuing "an exotic idea", which proved to be the origin of the European Monetary System (the EMS). Callaghan was asked not to mention it to his Chancellor of the Exchequer, Denis Healey, so had to craft a response behind his colleague's back, with the help of two key officials in the Treasury and the Bank of England. (Within weeks, of course, the circle in the know was spreading fast and Callaghan ordered Healey be told.) This early approach, and subsequent papers, suggest that the Germans and the French initially made some efforts to secure British participation. At one point the French seemed especially keen to bring in sterling, to dilute the dominance of the deutschmark in the new bloc.
They had little or no chance of success. Callaghan had been Chancellor during the British devaluation of 1967, and his career was lucky to survive the débâcle. It is no surprise to find that he determinedly rejected participation in the EMS for fear that it might lock us into a deflationary exchange rate. He had broader reasons as well: he was in his way almost as strong an Atlanticist as MT, and briefed his Treasury contact that "there was a belief that the US would become more protectionist" and that "the scheme reflected a turning away from the dollar and from US financial policy". In a long phone call to Carter on 17 April he shared with the President these deeper fears, and even warned delicately of Schmidt's disaffection with the US.
There was in fact some British support for EMS membership, led by the Bank of England with the Treasury in its slipstream. Callaghan sharply slapped this down, congratulating himself a fortnight before the summit for having "torpedoed that load of nonsense" (according to the diary of his policy adviser, Bernard Donoughue, 3 July 1978).
One procedural problem weighed on the British and illustrates a general problem about summitry of this kind. Participating states needed to act in concert to get maximum impact from whatever they agreed. Yet significant economic measures on the part of the G7 governments would take months to concert, and it was clear that the governments would need to show signs of activity in the interim because a policy of "waiting for Bonn" would leave everyone vulnerable to domestic criticism. Accordingly British officials hit on the formula that measures announced in the run-up to the summit should be presented as actions with a common purpose, part of a framework leading up to the summit. This manoeuvre, so characteristic of Whitehall, was agreed at the summit preparation group in a 12 hour meeting at the end of March. It was, perhaps, the best face that could be put upon things, and from the British point of view helped to hide the weakness of our economic position by appearing to place us in the position of agenda setters, British officials drafting the "five points" on which the framework was based.
Little drama attended the four summit plenaries themselves: the deals had already been made. The Germans did their bit, in a very resigned style. At a private meeting the evening before the summit opened Schmidt told Callaghan that he didn't expect the stimulus to increase growth in Germany, but promised not to say so in public. The press response was generally sceptical, as it had been following the London G7 the year before. On the monetary front the Council at Bremen overshadowed the Summit in Bonn, and had much the greater results over time. Arguably the grand US-German bargain proved of little benefit to the world economy, and a positive liability to both parties: within the US Carter's energy policy became a symbol of failure, even of defeatism, made much of by Ronald Reagan during the presidential election of 1980, while the German reflation achieved nothing in the face of the steep oil price rise of 1979-80 and the sharp tightening of US monetary policy under Paul Volcker, casting a long shadow over future policy in the Federal Republic.
1979 january 4-6: the quadripartite summit at guadeloupe
There was no quadripartite meeting of heads of government in Bonn: the French wanted one, but the Americans were opposed. Instead their foreign ministers met in the margins of the G7, laying the groundwork for a separate summit of the four heads of government on the French Caribbean island of Guadeloupe in January 1979, the proceedings conducted in English without interpreters.
As recently as November 2008 (at an event celebrating Helmut Schmidt's 90th birthday) Giscard has spoken of the great significance of this meeting, symbolising for him the return of post-war Germany to equal international status. Documents of the time show he consistently favoured the four over the seven, but bringing the quadripartite meeting out of the shadows of the G7 proved a dead-end in terms of summitry. It prompted understandable suspicion among the excluded that decisions affecting them were being made in their absence, and though it was denied that the four sought to constitute themselves a 'directorate', it is striking to find that it was at Guadeloupe that the decision was made to refuse Australia's bid to attend the 1979 Tokyo Summit. And returning afterwards to a UK in the grip of devastating strikes and ugly weather, the lightly-tanned British Prime Minister misjudged the mood and left himself open to the damaging headline in the Sun: "Crisis? What Crisis?", a fin de siècle moment in British politics. His successor, MT, proved less clubbable, and was certainly not well-placed to soothe Schmidt-Carter tensions. In fact Schmidt had formed a deep antipathy towards her well before she became PM, characterising her in unprintable terms to the Americans in November 1976 (his words thoughtfully recorded by the State Department): "she is a bitch, she is tough, she lacks scope and she cannot lead".
There were no more Guadeloupes.
LINKS: g7/G8 resources
The University of Toronto runs the "G8 Information Centre" (an online database of publicly available documents on the summits) and also hosts the G8 Research Group.
G8 Information Centre - public documents on summits since 1975 (communiques, etc)