G7 finance ministers and central bank governors concluded their two-day Paris meeting Tuesday with a joint statement pledging not to expand fiscal spending excessively as the Iran war pushes the global economy toward inflation risks. Bloomberg reported the joint statement was agreed on the meeting’s second day, with the commitment reflecting unusual cohesion among ministers who entered the talks with diverging views on trade, sanctions, and supply-chain policy.
French Finance Minister Roland Lescure hosted the gathering. U.S. Treasury Secretary Scott Bessent urged counterparts to align on stricter sanctions enforcement against Tehran to prevent the funding of Iran’s “war machine,” while German Finance Minister Lars Klingbeil declared the G7 “the right framework” for talking to the United States about ending the Iran war. ECB President Christine Lagarde and Eurogroup President Kyriakos Pierakakis attended throughout. British Chancellor Rachel Reeves urged coordinated action on inflation, supply chains, and restoring safe Hormuz navigation.
The expanded participation was a notable feature of the gathering. Economy ministers from the UAE, Syria, Qatar, Ukraine, Brazil, India, Kenya, and South Korea attended as invited guests, what the French G7 presidency described as an expression of “dialogue and solidarity” with states directly exposed to ongoing crises. Kenya’s presence carried particular weight after diesel-driven protests broke out in Nairobi earlier in the week as pump prices jumped 50%.
France used the meeting to urge the International Monetary Fund and the World Bank to increase assistance to countries most vulnerable to the economic fallout from the Middle East crisis. French officials highlighted concerns over rising fertiliser shortages and food security pressures that could disproportionately affect developing economies. France is also pitching a “common toolbox” of strategic trade deals, price floors, quotas, and tariffs to combat raw-materials disruption, and is promoting multilateral projects to develop alternative extraction and refining capabilities — including a French-Japanese factory under construction in southwest France to produce and recycle rare earths and magnets.
The communiqué’s fiscal-restraint commitment matters because of the bond-market backdrop. Long-term borrowing costs in several G7 economies have risen sharply on inflation concerns tied to energy supply disruption. The U.S. 30-year Treasury yield reached 5.121% last Friday, the highest since May 2025. U.K. 30-year gilt yields are at their highest since the late 1990s. Japan’s long-bond yields have risen markedly. The G7 commitment is intended to reassure bond markets that fiscal policy will not amplify the inflation pulse from energy costs.
European Commissioner for Economy Valdis Dombrovskis confirmed the meeting reaffirmed the need to reopen the Strait of Hormuz as soon as possible. Last month, G7 nations released 400 million barrels of strategic petroleum reserves following a phone call between G7 leaders — a move that tempered the rise in prices but only temporarily. The G7 leaders summit follows June 15-17 in the French spa town of Evian.
Continuing coverage: Geopolitics · Oil Prices · Gas Prices.