ROME/BRUSSELS: The world’s financial leaders committed to a more multilateral approach to the twin coronavirus and economic crises.
“We agreed that any premature withdrawal of fiscal and monetary support should be avoided,” Daniele Franco, Italy’s finance minister, told a news conference after an online meeting held by the G20 finance ministers and central bankers on Friday.
The financial chiefs agreed to maintain expansionary policies to help economies survive the effects of coronavirus disease (COVID-19).
The Italian presidency of the G20 group of the world’s top economies said the gathering of finance chiefs had pledged to work more closely to accelerate a still fragile and uneven recovery.
The G20 is “committed to scaling up international coordination to tackle current global challenges by adopting a stronger multilateral approach and focusing on a set of core priorities,” the Italian presidency said in a statement.
US Treasury Secretary Janet Yellen told the G20 Washington had dropped the Trump administration’s proposal to let some companies opt out of new global digital tax rules, raising hopes for an agreement by summer.
The move was hailed as a major breakthrough by Germany’s Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire.
Scholz said Yellen told the G20 officials that Washington also planned to reform US minimum tax regulations in line with an Organization for Economic Co-operation Development (OECD) proposal for a global effective minimum tax.
“This is a giant step forward,” Scholz said.
Franco said the new US stance should pave the way to an overarching deal on taxation of multinationals at a G20 meeting of finance chiefs in Venice in July.
The G20 also discussed how to help the world’s poorest countries, whose economies are being disproportionately hit by the crisis.
On this front there was broad support for boosting the capital of the International Monetary Fund (IMF) to help it provide more loans, but no concrete numbers were proposed.
To give itself more firepower, the IMF proposed last year to increase its war chest by $500 billion in its own currency called the Special Drawing Rights (SDR), but the idea was blocked by former US President Donald Trump.
“There was no discussion on specific amounts of SDRs,” Franco said, adding that the issue would be looked at again on the basis of a proposal prepared by the IMF for April.