In the era after Donald Trump and the coronavirus pandemic, global treasurers will make their most consistent efforts to date to redefine the world economic order.
As trade tensions no longer plague the G20 economies as they did during the former US president’s tenure, the first face-to-face meeting of its finance ministers since the outbreak last year will try to reach a consensus on unfinished matters such as climate and changes to the corporate tax system.
In addition to these issues, the July 9-10 meeting may assess the incompleteness of the global recovery, and the continued threat of setbacks caused by new variants of the new crown virus casts a shadow over it. After the OPEC+ negotiations broke down this week, inflation concerns have intensified and oil prices remain high, which may focus attention on the need to continue fiscal efforts to support growth.
“The global economy is cooperating again,” said Rosamaria Bitetti, an economist at the University of Louise in Rome. “For the G20, this is a huge opportunity to think about how this pandemic shows that in our interconnected world, problems are global and need to be resolved together, leaving nationalism behind.”
Since Italy hosted the meeting in Venice as the chair of the group, the participants will not forget the symbolic significance of holding the meeting in the former intercontinental trade hub. They can also find inspiration in the city’s fire-cursed opera house—Phoenix or Phoenix—for the inspiration to struggle in the embers of an unprecedented global crisis.
The risk is that the discord and trauma that plagued international conferences during Trump’s administration may persist, including his frequent boasting of doubts about China.
For French Finance Minister Bruno Le Maire (Bruno Le Maire), the group now has a responsibility to build on the consensus reached at the beginning of the pandemic.
He told reporters on Tuesday: “The G20 must show in Venice that it can still perform its duties and can continue its success since February 2020, with concrete, new and radical responses to the challenges ahead. .
Here are some areas that need to be discussed:
Finance ministers may discuss ongoing efforts to deal with the economic impact of the pandemic. Such dialogue may include the need for continued government support and the outlook for inflation.
U.S. Treasury officials informed reporters on Tuesday that Secretary of State Janet Yellen will urge other countries not to withdraw COVID-related fiscal measures prematurely. She will also encourage long-term thinking about promoting economic growth, and point out President Joe Biden’s spending recommendations on infrastructure, labor support, and green investment.
This emphasis also shows that, at least for US officials, the urgency of maintaining economic recovery is still more urgent than inflation concerns. The same is true in Europe, where countries are worried about the premature cancellation of generous stimulus measures, while the European Central Bank has played down concerns about prices.
As concerns about the impact of new virus strains on recovery intensify, countries will also discuss ways to avoid excessive differentiation between economies.
The European Commission stated that even within Europe, the rebound was “very uneven”. This week it is expected that Germany and the Netherlands will reach their pre-crisis output levels a year earlier than Italy and Spain. This phenomenon is happening on a global scale, indicating that the gap between countries and regions is widening.
“The world is facing a deteriorating two-track recovery,” IMF President Kristalina Georgieva (Kristalina Georgieva) said in a blog post on Wednesday. “This is a critical moment that requires urgent action by the G20.”
The G-20 has long struggled to reach agreement on how to deal with climate change, and this meeting in a city that is more susceptible than most sea-level rise may spark more debate.
In his speech at another climate change conference on Sunday, Yellen may reiterate the US view that integrating private funding is essential to solving this problem.
Under Biden’s leadership, the United States is catching up with Europe and is preparing to establish a system that requires companies to disclose more information about how climate change threatens their businesses. Climate-related financial disclosures may be an issue discussed in the G20 and subsequent meetings.
The ministers will approve a global agreement between 131 countries facilitated by the Organization for Economic Cooperation and Development, which proposes a minimum corporate tax of at least 15% and new rules for the distribution of taxes from the world’s largest companies.
Although the discussion will continue until October when the leaders of the G20 meet in Rome, the preliminary agreement in Venice will mark another important step towards reshaping the global tax landscape.
Negotiations may still be deadlocked due to differences, such as how much tax revenue should be redistributed to developing economies, and once new global rules are in place, whether countries will meet the United States’ requirements for abolishing digital taxation.
Special drawing rights, or special drawing rights, will also become one of the themes, as the International Monetary Fund prepares to make the largest injection of resources in its history to help increase global liquidity and help emerging and low-income countries cope with constant Increased debt.
France is pushing rich countries to lend out new special drawing rights so that Africa will eventually receive a total of US$100 billion in funding. In order to achieve this goal, the International Monetary Fund needs to find an effective mechanism, and countries outside the G7 need to participate.