To an important degree, the G7 was founded as a forum to address the collective security interests of the West amidst the rising global threats of the first half of the 1970's, and two failed attempts at a regional response from a badly divided west. The threats, coming from an assertive "East" and the `South, arose from the defeat of the United States in Vietnam from 1968 to April 1975, the simultaneous spread of Eurocommunism throughout the Mediterranean tier of Europe, the 1973 Arab oil embargo as part of the October Middle East war, and the 1974 Indian nuclear explosion and the prospect of further proliferation which it brought. The failures in regional response were Henry Kissinger's attempt to revive the fraying transatlantic alliance through his "Year of Europe" campaign of 1973, and French Foreign Minister Jobert's Gaullist effort to construct French and European security on a more all-European core.
In response, U.S. Secretary of State Henry Kissinger, confronting a "crisis of governability" throughout the western democracies and drawing upon the logic of the Concert of Europe he explored in his doctoral dissertation, led U.S. President Gerald Ford to give birth to the G7 as a permanent institution centred on an annual Summit of the leaders of the major, democratic, marketed-oriented powers of the world. His conception was evident in his commitment to Canada, prior to the first Rambouillet Summit, that there would be a subsequent Summit to which Canada, excluded by the French from Rambouillet, would be invited. Kissinger's desire to include Canada was based on two considerations: its ranking security relevant capabilities of oil and natural resources such as uranium; and a geographically and historically based position as a country that conducted a global foreign policy and could thus help offset the geographic and attitudinal Eurocentricity of the original Rambouillet six.
While rebuilding shattered economic regimes dominated the agenda at the French-hosted 1975 Rambouillet Summit, the security role of the G7 was clearly evident when U.S. President Gerald Ford, with Kissinger at his side, hosted the 1976 Puerto Rico Summit. Here, the five largest members met secretly among themselves to determine that needed economic support for Italy's beleaguered currency would not be forthcoming if the Italians allowed Communist Party members to join a coalition government. At the Summit table, the seven learned how the banks in each of their countries were individually engaged in generous lending to the USSR, in ways that could collectively represent a substantial western dependence on the USSR. The leaders also discussed nuclear energy and its link to India's nuclear proliferation. The central purpose of the newly institutionalized G7 was well articulated by Canadian Prime Minister Pierre Trudeau who declared at the conclusion of the Summit: A...the success of these conferences...will be judged by whether we can influence the behaviour of people in our democracies and perhaps even as important the behaviour of people on the outside who are watching us, in a way in which they will have confidence that our type of economic and political freedom permits us to solve problems.  "
The very creation of the G7 reflected the failure of the United Nations and Atlantic systems of international institutions to deal adequately with these new shocks to the prevailing order. Relative to these institutions and their inner management cores, the G7 offered the four advantages of concerted power, constricted participation, common purpose, and political control by leaders, who now, unlike their 19th century predecessors, were all popularly elected . By adding Japan, Germany, Italy, Canada and the European Union, while eliminating the UN Security Council's USSR and China, the G7 secured greater collective dominance over the full international system, and greater equality of members within the core, save for a few specialized military capabilities such as in-place national nuclear weaponry and large standing armies. With seven members by 1976, the G7 remained small enough to reap the advantages of a K-group in arriving at and monitoring the implementation of collective decisions. With all members major powers with democratic polities and market economies, it benefited from a strong foundation of common purpose, whose unity was highlighted and strengthened by the strong assault from the communist East and the socialist South. And as an institution designed to overcome the bureaucratization of international relations, prepared by leaders' personal representatives and delivered directly by the leaders themselves, it exhibited a political control that allowed for authoritative agreements across all issue areas, and ones that brought fundamental change to established regimes.
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