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SENDAI – Thank you all for joining us today.
I would like to thank my counterpart Deputy Prime Minister and Finance Minister Aso, Governor Kuroda, and the people of Sendai for graciously hosting us in this beautiful city, which has recovered so well from the devastating tsunami of March 2011.
We have had a successful series of meetings here in Sendai, and we are grateful to the Japanese for their warm hospitality.
The G-7 is meeting at an important moment for the global economy, not because it is a time of crisis, but because of the uncertainty that exists around the world. These meetings give us an opportunity to communicate with one another about what we are seeing in our economies and what policies should be employed to put the global economy on a stronger path.
While the U.S. economy continues to strengthen, the global recovery remains uneven and risks have become more pronounced since last year. The weakness in the global economy is primarily due to a continued shortfall in aggregate demand and policymakers need to work together to ensure that slow global growth does not become entrenched. In particular, we need the balanced use of all the policy tools—fiscal policy, monetary policy and structural reforms—to address weak demand, boost employment, and tackle our common long-term challenge of aging populations.
Over the past few days, I have emphasized the importance of reaffirming our exchange rate commitments, including our agreement to consult closely with one another and to refrain from competitive devaluation. Those commitments made in Shanghai, along with our agreement to use all policy levers to boost global growth, have helped to contribute to more confidence in the global economy and I certainly hope that the meetings we have had here in Sendai among the G-7 will have that same effect.
On financial regulation, the G-7 is intensifying its focus on implementation of the core G-20 reform agenda. We had a serious discussion on combating the financing of terrorism and addressing beneficial ownership, including the actions the G-7 will take to further enhance the transparency of financial transactions and to freeze the assets of supporters of terrorism. Consistent with this effort, the United States recently took several important steps to further increase financial transparency and combat money laundering, corruption, and offshore tax evasion through administrative action and proposed legislation on beneficial ownership.
Tax avoidance is a significant concern that we take very seriously. Last month, the U.S. Treasury announced its third action within the last two years to limit corporate inversions. This week, we discussed the importance of implementing the G-20/OECD Base Erosion and Profit Shifting package, and of promoting the “inclusive framework” that will permit non-G-20 OECD countries that commit to the BEPS package to join in implementing BEPS.
Finally, we engaged on a number of issues of global significance, including Greece and Iraq. I continued to emphasize the importance of providing support for Iraq as it battles ISIL and implements necessary economic reforms. We have made substantial progress in identifying sources of bilateral and multilateral assistance for Iraq at this critical time and I welcome news of staff-level agreement on a new Stand-By Arrangement with the International Monetary Fund. I also continued to urge the importance of finding a pragmatic and sustainable solution for Greece that includes meaningful debt relief as it continues to deliver on reform implementation.
I will also note that while we have been here in Sendai, at home we reached a bipartisan agreement to give Puerto Rico the ability to restructure its debt. It is critical that Congress pass this legislation, as there are very significant bond payments due in July. It is always significant when you reach bipartisan agreement on a challenging issue, and in this case time is of the essence. As with all compromises, the legislation includes provisions that not everyone will like. But the overall approach provides workable tools for the restructuring of Puerto Rico’s debt and appropriate oversight of Puerto Rico’s financial policies. It is important that Congress act quickly.
I am grateful to all of my colleagues for a successful set of discussions, and I am happy to take a few questions.
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