France says planning G7 finance meeting on Mideast

PARIS: France said Wednesday it is planning a meeting of G7 finance ministers on the Middle East crisis for early next week, as the war fuels fears for the global economy.

“I have spoken with various counterparts, in particular Scott Bessent, who is the US treasury secretary. And we agreed to hold a meeting which will take place at the beginning of next week,” French Economy and Finance Minister Roland Lescure told Franceinfo radio.

“We want to let a week go by to see how the conflict develops, how the markets evolve. We’ll have the finance ministers and the central bank governors there as well.”

France currently holds the rotating presidency of the Group of Seven advanced economies, which also includes Canada, Germany, Italy, Japan, the United Kingdom and the United States.

A first meeting of finance ministers under the French presidency was held on January 27.

Lescure said next week’s meeting was expected to be an exchange of views.

“We’re going to listen to what is coming up from the ground, from businesses, from economists in these different parts of the world,” he added.

“The idea is to be able to discuss the state of the situation, so that we can assess any responses that might be needed, if we have to act.

“In a conflict which is currently a local conflict in one region but has global repercussions, it is obviously essential that we coordinate.”

Fuel prices

The war sparked by the US-Israeli bombing of Iran launched on Saturday has led to a sharp fall in stock markets, particularly in Europe and Asia.

Since the start of the week, France’s benchmark CAC40 index has lost more than five percent. Its German equivalent, the Dax, has fallen by nearly six percent, while London’s FTSE 100 has dropped nearly four percent.

“We’re not in a stock market crash,” said Lescure, urging people to “keep their cool”.

Investors are concerned about a sharp rise in oil and gas prices caused by disruptions to supplies through the Strait of Hormuz, which handles around 20 percent of the world’s seaborne oil and liquefied natural gas shipments.

READ MORE: Oil prices rise 3% as Iran crisis disrupts Middle East supply

They fear a resurgence of inflation, similar to the rise in prices triggered by Russia’s full-scale invasion of Ukraine in 2022.

Iran’s Revolutionary Guards claim they have “complete control” of the strategic waterway and warned that any vessels seeking to use it risk damage from missiles or stray drones.

But US President Donald Trump said the US Navy was ready to escort tankers through the key shipping route, which limited losses on Wall Street on Tuesday.

READ MORE: US natural gas futures leap as conflict disrupts global supplies

Like many countries, France is watching for the impact of the war on petrol prices.

Junior energy minister and government spokesperson Maud Bregeon told BFMTV on Wednesday they expected a “limited” short-term increase of “a few cents”.

“As for what happens next, it will depend on how intense the conflict becomes,” she added.

But she stressed there was “no risk whatsoever of a disruption to fuel supplies” thanks to stockpiles and diversified imports.

Asked about the possibility of measures to offset any price increases, she said it was “far too early to talk about that” and that the priority was to work towards reopening the Strait of Hormuz.

Lescure said inspections would be carried out to ensure any increases in fuel prices were “reasonable”.