CARBIS BAY, England (Reuters) – Leaders of the Group of Seven Rich Nations broadly agreed on the need to continue to support their economies with fiscal stimulus, a source added to discussions on Friday, the opening day of a G7 Summit, is familiar.
Support for further incentives was shared by all heads of state and government, including Angela Merkel of Germany, who has traditionally opposed heavy borrowing to boost growth, a position she eased in the face of the COVID-19 crisis.
President Joe Biden’s administration urged its allies to keep spending, and Treasury Secretary Janet Yellen urged her G7 colleagues to “grow up” in February.
The source said G7 leaders believe there should be long-term policies to ensure the health of public finances in the future, reiterating the position of its finance ministers who met in London earlier this month.
The leaders believed that any spike in inflation would prove temporary in many countries after the lockdown, the source said.
Italian Prime Minister Mario Draghi stressed the importance of measures to reduce unemployment such as retraining and support for younger workers, a proposal supported by Canada’s Justin Trudeau, the source said.
Reporting by Guy Faulconbridge; Letter from William Schomberg