(Bloomberg) -- Group of Seven leaders have gathered in Biarritz, France and the host, French President Emmanuel Macron, has just pulled a massive surprise on his guests by inviting the Iranian Foreign Minister Javad Zarif.
Merkel Defends Macron Decision to Fly in Zarif (6:39 p.m.)
As news of Iranian Foreign Minister Javad Zarif’s lightning visit to Biarritz was still sinking in, German Chancellor Angela Merkel rode to Macron’s rescue.
She espoused the French line that it is a meeting of two foreign ministers and therefore not part of the G-7. She told reporters that every attempt to solve the crisis in Iran was welcome. She later said she only knew Zarif was coming a short time before he arrived.
The picture that is forming is that the French gave delegations a very short warning that this was happening. In any case, Zarif is leaving tonight.
The turning point for flying Zarif over was the dinner last night. Merkel said that a "good talk about Iran will now be communicated to Zarif," in person, by his counterpart.
That dinner is beginning to loom large in the G-7 storyline for 2019. All seem to agree it was tense, it was about both Iran and whether to let Russia’s Vladimir Putin back into the G-7 -- and that’s about it. Macron has said he believes the other leaders vested him with powers to deal directly with Iran at the dinner, though Trump has said Macron doesn’t speak for him.
French Official Wants to See How Far Talks Can Go (4:43 p.m.)
The French official was asked if there’s any chance Zarif could meet the U.S. delegation. He said that’s not planned at the moment. This is just a French-Iranian meeting at the moment. But they want to see how far those talks can go.
French Won’t Say If Zarif Is Meeting Macron (4:05 p.m.)
A French official said that Zarif hasn’t been invited to the G-7 talks. He’s instead meeting with French Foreign Minister Jean-Yves Le Drian. The official refused to say whether Zarif will also be seeing Macron.
Zarif Confirmed as Iranian Dignitary in Biarritz (3:44 p.m)
It appears Macron has thrown a curve ball at his fellow leaders by inviting Iran’s Foreign Minister Mohammad Javad Zarif to Biarritz. It’s unclear in what capacity as French organizers have point blank refused to confirm anything. Officials from other delegations were surprised. The Italians found out from French news wire AFP.
Macron had wanted to rip the script, and he had already irritated the Americans who accused the French of trying to manipulate the agenda to embarrass the president. Zarif was in Paris only last week, meeting with Macron about the future of the landmark 2015 nuclear deal. Zarif described the talks as “constructive and good”, the semi-official Iranian Students’ News Agency reported.
The Biggest Source of Tension Is Russia (2:26 p.m.)
G-7 leaders just can’t seem to get on the same page about Russia’s Vladimir Putin, who was booted out of the club after ordering the annexation of Crimea in 2014. Whether to let him back in has become a sore point at the current gathering, according to an EU official briefed on the gala dinner Saturday night. The official described the mood as tense.
Indeed, Trump described it as a” lively discussion” and Johnson agreed: “It was lively!” There are several reasons why the leaders are on the outs with Putin: from the festering conflict with Ukraine, the suspected meddling in their elections to its intervention in Syria.
The U.K. holds Putin responsible for deploying a chemical weapon on British soil to poison a suspected Russia double agent and rallied international support to eject Russian diplomats. Trump went along with it but he’s always been of the view that it’s illogical not to have such an important global player at the table.
Next year he will have the option to invite Putin as a guest.
Johnson Goes Swimming (2:02 p.m.)
Johnson has been switching from goofy Boris to serious statesman with some success. On arrival to the dinner on Saturday he struck a pose that saw his French hosts break out in laughter. And today he took a dip in the ocean before breakfast with Trump.
While out on his swim, the prime minister said he had Brexit epiphany: “From here you cannot tell there is a gigantic hole in that rock. There is a way through. My point to the EU is that there is a way through, but you can’t find the way through if you just sit on the beach.”
One local hotelier however suggested another interpretation of that symbolism. She warned that it’s not safe to swim out to the rock, because the waters can get choppy.
No Coordinated Fiscal Stimulus (1:47 p.m.)
In his midday update, Macron said there won’t be any coordinated stimulus for the global economy coming out of this meeting.
“We need boosters for global economy,” he said. Still, “it’s not at the G-7 level that we decided to make budgetary or tax cuts.”
He said leaders discussed mechanisms for shoring up growth, which would involve a combination of tax cuts, deregulation and stimulus spending for different countries.
Trump Pulls Macron Back Over Iran (12:34 p.m.)
Macron is touting an agreement to send a joint message from the G-7 to Iran as one of his victories from last night’s dinner. “We’ve enacted a common communication, which in my view has a lot of value,” he said this morning in a French television interview.
But Trump cast doubt on how much authority Macron will have. “We’ll do our own outreach,” he said. “But I can’t stop people from talking.”
One person familiar with the situation says Trump does not agree that Macron can convey a message from the G-7 to Iran since the leaders didn’t all settle on what the message should be.
Trump has pursued a “maximum pressure” campaign against Iran, using sanctions to cut off their sales of oil in a way that’s hurting that nation’s economy. White House officials say the G-7 countries agreed Trump’s pressure campaign on Iran is having an impact, and that it should continue.
Macron Is Talking Up Progress on Iran (11:50 a.m.)
The French president is trying to show that he’s achieved something on the geopolitical issues he’s raised. He told TF1 television Sunday that leaders agreed they need to stop Iran developing nuclear weapons and destabilizing the region -- which was the state of play before talks began.
The G-7 also agreed on a common way of communicating over Iran and a decision on action that enables them to “reconcile their positions a bit,” he said.
When Johnson Sees Tusk, It Could Get Tense (11:20 a.m.)
Johnson took care of Brexit business with Macron and Merkel in the days just before the G-7 -- everyone made their position clear (no budging).
But the U.K. prime minister is beginning to realize that getting a divorce deal done with the European Union by the Oct. 31 deadline was not going to be quite as easy as he might have thought. As for the Europeans, they too are starting to think about what they can do to avert a no-deal scenario that could be economically bad news for all countries involved.
Ian Wishart sets out the stakes, and the mood, as Johnson meets Donald Tusk, the EU’s president who tends to speak on behalf of the bloc’s leaders on matters related to Brexit.
What is Macron’s Plan for Iran? (11 a.m.)
After their 3-hour informal Saturday dinner where they discussed matters including Iran, leaders of the G7 gave Macron -- as chair of the Group -- the authority to hold talks and pass on a message from them to the Persian state, according to a French official.
The official added that the message, based on the content of leaders talks Saturday, hadn’t yet been passed on. The official didn’t respond to request for details on the content of the message and of last night’s talks content.
Second Thoughts on Trade War? (10: 52 a.m.)
Trump rarely displays doubt, so when shows even a glimmer of it, it grabs one’s attention. The president is feeling the heat at the G-7 from his aggressive trade stance against China. Leaders are being careful on how to bring it but they are bringing it up -- persistently.
During a meeting with Boris Johnson , he was asked whether he had “any second thoughts on escalating the trade war” with China, after he announced higher tariffs late Friday.
“Yeah, sure, why not?” Trump replied. Reporters asked again whether he had second thoughts. “Might as well, might as well,” he replied, before reporters asked again. “I have second thoughts about everything,” he said.
Trump has seen his poll numbers sag ahead of his 2020 re-election bid and he is relying on a strong economy to stay in power for another term.
Trump Says ‘Very Close’ To Japan Trade Deal (9:50 a.m.)
The U.S. is close to reaching a trade deal with Japan, Donald Trump said, as his trade chief hinted an announcement could come within hours.
“We’re very close to a major deal with Japan,” Trump said Sunday morning during a meeting with Prime Minister Boris Johnson at the Group of Seven summit, with Trump due to meet Japan’s Shinzo Abe later Sunday morning in France. “Prime Minister Abe and I are very good friends, really good friends. We’ve been working on it for five months.”
Japanese media have reported that the U.S. and Japan have agreed on a trade deal that will keep U.S. tariffs on Japanese cars in place while removing barriers to U.S. beef and pork sales to Japan.
Johnson Finds a Way to Raise Tariffs With Trump (9:30 a.m.)
Part of Johnson’s balancing act at the G-7 is to strike a good relationship with Trump -- whom he needs post-Brexit for a trade deal with the U.S. -- but also speak truth to power. Back home, the perception of a U.K. prime minister being America’s poodle is a bad look, especially if you could be heading into an election.
So at the breakfast with Trump, Johnson found a way to raise criticism, “sheep-like.”
Here it was: “I congratulate the president on everything that the American economy is achieving. It’s fantastic to see that. But just to register a faint, sheep-like note of our view on the trade war -- we’re in favor of trade peace on the whole, dialing it down a beat.”
Johnson said that “the U.K. has profited massively in the last 200 years from free trade and that’s what we want to see. So, we’re keen to see that. We don’t like tariffs on the whole.”
Trump responded with a tongue-in-cheek question about how the U.K. had fared in the past three years.
Would Trump Declare a National Emergency on China? (9 a.m.)
Trump has said a 1977 law known as the Emergency Economic Powers Act would allow him to order companies to leave China, though experts say that was never the intent of the law. In addition, it would be massive disruption to ask companies to pull up stakes in China, or even to re-route supply chains located there.
Asked about whether it was on the cards, here was the answer: “For many years this has been going on. In many ways it’s an emergency. I have no plan right now. Actually we’re getting along very well with China right now. We’re talking. I think they want to make a deal much more than I do. We’re getting a lot of money,”
The law isn’t usually used to regulate international trade, but more regularly has been used to impose sanctions on countries resulting from national security threats. President Jimmy Carter invoked it in 1979 during the Iran hostage crisis.
Johnson Doesn’t Need any Advice, Says Trump (8:45 a.m.)
There were 18 people sitting in on the working breakfast between Trump and Johnson. The two men had been photographed on Saturday night walking and talking in the margins of the summit.
Trump was asked if he had Brexit advice for Johnson: “He needs no advice, he’s the right man for the job. I’ve been saying that for a long time. It didn’t make your predecessor very happy.”
Johnson: “You’re on message there, I’m very grateful... we’re looking forward to having some pretty comprehensive talks about how to take forward the relationship in all sorts of ways.... And we’re very excited about that.”
Trump: “we’re going to do a very big trade deal, bigger than we’ve ever had with the U.K. and now at some point they won’t have the obstacle, they won’t have the anchor around their ankle because that’s what they have.”
Putin at Next Year’s G-7? It’s possible (8:35 a.m.)
U.S. President Donald Trump told reporters it’s “certainly possible” he will invite Vladimir Putin as a guest of next year’s Group of Seven summit. He’s said before how he thinks it makes no sense not to have the Russian president at the table. Putin was ejected from the G-8 in 2014 over Russia’s annexation of Crimea. His eventual return into the fold has been a topic of debate -- but Europeans have said the Ukraine crisis needs to be resolved first.
Next year Trump is the host, and as such has the discretionary power to invited who he wants. Macron this year, for example, invited the leaders of India, Chile, Australia and Spain.
The most-watched bilateral is about to start (8:15 a.m.)
Donald Trump is up and tweeting that there have been some very good meetings and leaders are getting along. He is about to sit down with Boris Johnson, making his debut at the summit after replacing Theresa May as prime minister. The two men seem to get on famously, in stark contrast with the forced, strained relationship with May.
For a run-down on what to expect, read this:
Protesters Kept at Bay, Police Use Tear Gas (last night)
French riot police deployed water cannons and tear gas to disperse a crowd of activists that included Yellow Vest protesters, environmentalists and even some Basque separatists. They have been largely kept at a safe distance from the leaders, who are in the heavily-guarded red zone.
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--With assistance from Josh Wingrove and Alex Morales.
To contact the reporters on this story: Jennifer Jacobs in Biarritz, France at email@example.com;Helene Fouquet in Biarritz at firstname.lastname@example.org;Arne Delfs in Biarritz at email@example.com
To contact the editors responsible for this story: Ben Sills at firstname.lastname@example.org, Craig Gordon, Flavia Krause-Jackson
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