The G-20 has set a pandemic to redefine the world economic order Business and Economic News

This week, world finance leaders will make the biggest effort to redefine the world economic order in the aftermath of Donald Trump and the coronavirus pandemic.

Because he has no longer withstood the trade tensions caused by the group of 20 economies during the former US president’s tenure, he will try to create consensus on unfinished business from the climate at his first personal meeting of finance ministers since his illness last year. change in corporation tax.

Along with these issues, the July 9-10 meeting may take stock of an incomplete global recovery, clouded by persistent threats of delays in new variants of coronavirus. This may lead the minds to focus on the need for continued fiscal efforts to support growth, amid concerns about inflation broken down in OPEC + talks this week and high oil prices.

“Global economies are working together,” said Rosamaria Bitetti, an economist at Luiss University in Rome. “It’s a tremendous opportunity for the G-20 to think about how this pandemic showed that in our interconnected world, global problems need to be addressed together, leaving nationalism behind.”

Due to the head of the meeting group that Italy will hold in Venice, the symbolism of the gathering at the former intercontinental shopping center will not be lost among the participants. They can also see the name of the city’s damned opera house – La Fenice or Phoenix – to inspire what to try in the embers of an unprecedented global crisis.

The risk is that Trump may continue to be scarred by disagreements that have been plagued by international meetings over the years, including echoes of China’s frequent suspicion.

For French Finance Minister Bruno Le Maire, however, it is the responsibility of the group to build on the consensus reached in the early stages of the pandemic.

“The G-20 must show in Venice that it can still meet its responsibilities and be able to provide concrete, new and radical answers to future challenges in order to follow up on what has been achieved since February 2020,” he told reporters on Tuesday. .

Here are some areas for closer discussion:

Tax assistance

Financial leaders are likely to discuss ongoing efforts to address the economic impact of the pandemic, a dialogue that may address the need for continued government support and opportunities for inflation to pick up.

U.S. Treasury officials told reporters on Tuesday that Secretary of State Janet Yellen will demand that other countries not withdraw fiscal measures related to COVID prematurely. It will also encourage thinking about boosting economic growth over the longer term, with President Joe Biden emphasizing proposals to spend on infrastructure, employee support and green investments.

Such an emphasis indicates that, at least for U.S. officials, a continued economic recovery is more urgent than fears of inflation. The same is true for Europe, where countries are responsible for removing the generous stimulus too early, and the European Central Bank is reducing its price fears.

Irregular growth

Countries will also discuss ways to prevent excessive divergence between economies, as they are concerned about the impact of new virus strains on recovery.

Even within Europe, the rebound is “very uneven,” according to the European Commission, which this week announced that Germany and the Netherlands will reach pre-crisis production levels ahead of Italy and Spain. This phenomenon is happening all over the world, widening the gap between countries and regions.

“The world is experiencing a two-track recovery,” NDF CEO Kristalina Georgieva said in a blog post on Wednesday. “This is a critical moment that calls for urgent action by the G-20.”

Climate change

The G-20 has long struggled to agree on how to deal with climate change, and at this meeting, in a city that is weaker than most in the face of rising sea levels, there is likely to be more discussion.

In a speech at another conference on climate change on Sunday, Yellen could reaffirm U.S. views that it may be crucial to channel private funding to address the issue.

Under Biden’s mandate, the U.S. is stepping up its efforts in Europe to prepare a system to provide companies with more information on how climate change threatens their operations. Climate-related financial outbreaks may be a topic discussed at the G-20 and subsequent conferences.

Corporation Tax

Ministers will approve a global agreement between the 131 countries proposed by the Organization for Economic Co-operation and Development at least 15% and new rules for the distribution of tax revenues to the world’s largest companies.

While the debate is expected to continue until the G-20 leaders meet in Rome in October, a preliminary gesture in Venice would mark another important step towards reshaping the global tax landscape.

Negotiations could still be exacerbated by disagreements, such as how much tax revenue should be distributed to developing economies, and whether countries will respond to the U.S. demand for a digital tax withdrawal after the introduction of new general rules.

NDF resources

Special drawing rights, known as CSR, will be among the topics, as the International Monetary Fund prepares the largest injection of resources in its history to help boost liquidity around the world and help the debt of emerging and low-income nations.

France is pushing rich countries to re-issue their new SDRs so that Africa can eventually receive $ 100 billion. To achieve this goal, the NDF will need to find an effective mechanism and involve countries outside the Seven Groups.