Brussels, 22/07/2013 (Agence Europe) - The priority should be growth first, then budget consolidation, explained the G20 finance summit last weekend in Moscow (see EUROPE 10892). The world's leading economies plan to adopt an action plan on budget and economic policies, including structural reforms, at the G20 summit in Saint Petersburg on 5 and 6 September.
Russian Finance Minister Anton Siluanov said after the G20 that work was needed right now to restore growth and, when the economy picks up, budget consolidation can be dealt with. In the light of global growth that is too weak and unemployment that is too high, the G20 finance summit said it was prepared to take key action in the short-term to stimulate the return of robust, jobs-rich growth, explaining in the final declaration that monetary policy support for growth would continue where needed and the sale and consolidation of public finance consolidation would be calibrated.
In order to encourage its members to adopt credible strategies, the G20 will introduce an ambitious medium-term budget action plan that takes account of the economic climate and contains public debt. The summit said the action plan would include an exhaustive list of structural reforms to boost productivity and jobs.
Tackling tax erosion. The G20 ministers and central bankers adopted the OECD's 15-point action plan to tackle the erosion of the tax base and the transfer of profits by multinationals. They say that ensuring that all taxpayers pay their fair share is a high priority in a context of budget sustainability, growth stimulus and developing countries' need to finance their economies. Recognising that shifting profits to avoid tax is a major problem, they said that the profits should be taxed where they are made and where value is created. A special working group on tax in the digital economy will be set up. EU Taxation Commissioner Algirdas Semeta is delighted with the focus on the digital economy, explaining in a press release that this very important subject will be on the agenda of the European Summit in October.
Repeating that it wants automatic exchange of bank information to become the global norm, the G20 asked the OECD to submit a progress report on this, together with a timetable for extending automatic exchange of information in 2014. A follow-up mechanism will be set up to ensure the implementation of the automatic exchange of tax information.
On financial matters, the G20 welcomed the recent agreement between the EU and the United States on a roadmap on convergence in their derivatives legislation, saying that the rules can be different, where required, in terms of both quality and systems for ensuring observance of the rules. The G20 calls on countries that have not already done so to introduce as soon as possible this year regulations to transpose the Basel III bank capital requirements. (MB/transl.fl)