G-7 finance chiefs highlight need to support pandemic-hit economies

2 weeks ago
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Finance chiefs from the Group of Seven countries on Friday emphasized the importance of supporting pandemic-hit economies toward a recovery, with the United States calling for further fiscal aid and vowing to return to multilateralism.

The teleconference among the G-7 finance ministers and central bank governors was the first since the new administration of U.S. President Joe Biden launched last month with a pledge to shift away from his predecessor Donald Trump’s unilateralist “America First” policy.

It was also the first ministerial meeting of the G-7 — which groups Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union — under Britain’s presidency in 2021.

Photo taken on May 24, 2016, shows flags of Group of Seven industrialized countries. (Kyodo)

Britain said the attendees exchanged views on how best to proceed through the phases of the global recovery from the coronavirus pandemic. Italian Economy and Finance Minister Roberto Gualtieri tweeted that the G-7 ministers confirmed “their common and coordinated commitment to support the recovery” and that “the withdrawal of policy support is premature.”

U.S. Treasury Secretary Janet Yellen stressed the Biden administration’s commitment to multilateralism to solve global issues, stating that her country “places a high priority on deepening our international engagement and strengthening our alliances,” according to a statement from the Treasury Department.

On the need for additional fiscal aid, Yellen asserted that “the time to go big is now” and that the G-7 should be focused on what more they can do to provide support at this time, it said.

Japanese Finance Minister Taro Aso told reporters that he called for “policy responses” to put the economies on a recovery path.

He called for accelerating vaccine distribution in a way that will benefit developing countries, an issue which, according to Britain’s finance ministry, was also touched upon by Chancellor of the Exchequer Rishi Sunak.

Support for low-income nations was also discussed during the virtual meeting. The Group of 20 major economies — which includes the G-7 members as well as China — is currently leading a debt relief program for poorer nations that have been ravaged by the pandemic.

Aso took a swipe at Beijing over its attempt to exclude China’s state-owned financial institutions from the debt relief initiative by classifying them as commercial lenders.

International organizations such as the International Monetary Fund and the World Bank “should grasp the reality” of China’s financial aid programs, he said. China is a major creditor in the developing world.

As for priorities for the year, Sunak cited support for the global economic recovery as well as progress toward new international taxation rules for digital giants after multilateral negotiations have stalled amid U.S. concerns over their potential impacts on American companies.

Britain urged the G-7 to “work together towards reaching an enduring multilateral solution (on the tax issue) by the mid-2021 deadline,” its finance ministry said.

Sunak also called on his international counterparts to make climate and nature considerations a central part of all economic and financial decision-making this year, with Britain pushing for the G-7 to come up with concrete steps to realize a carbon-free society.

This year’s summit is planned from June 11 to 13 in Cornwall, southwest England. The United States held the rotating presidency last year, but Trump, who has called the G-7 framework “outdated,” ended up not hosting an in-person summit amid the pandemic.


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