At the core of the European Union’s terms of reference for the G20 Finance Ministers and Central Bank Governors meeting in Washington on 17-18 October, seen by EUROPE, are the fight against anti-protectionism, the taxation of the digital economy and sustainable investment.
Acknowledging the gloomy state of the global economy and expressing particular concern about the impact of trade sanctions on global growth, the text states from the outset that resolving trade tensions “deserves the highest priority”.
Sustainable and inclusive growth that directs public resources towards investment must be achieved through a delicate balancing act: countries “with fiscal space and large current account surpluses” - meaning Germany, but also the Netherlands and Austria - are called upon to “consider using it to stimulate high-quality tangible and intangible investment”, the text of the terms of reference states. This encouragement is counterbalanced by a reference to “countries with high debt levels”, which are encouraged to “pursue prudent fiscal policies to put public debt credibility on a downward path”, targeted primarily at Italy, Greece and Portugal.
Europeans also reiterated their Osaka commitment to a rules-based multilateral trading system, the reform of the World Trade Organization (WTO) and the fight against protectionism - now customary references in EU declarations at international fora.
According to the document, new international rules, on support to industry and the financing of officially supported exports by the International Working Group on Export Credits, respectively, are also needed to achieve these objectives.
For the EU, the highest priority should be given to finding international solutions to tax the digital economy; this should be done by 2020 at the Organisation for Economic Co-operation and Development (OECD) (see other news).
In the document, the EU also calls for intensified work by the G20 on tax transparency.
It also calls for a “comprehensive, rapid and consistent” application and assessment of the financial reforms agreed in the G20 framework and for work on sustainable finance to be “credibly” included in them.
As for the financing of the International Monetary Fund (IMF), the EU Member States espoused an institution based on quotas that maintains its resources at an equivalent level. “We would be willing to support a quota increase”, the EU says in the text, or at least, an agreement to double the New Arrangements to Borrow (NAB) at a minimum. (Original version in French by Hermine Donceel with Marion Fontana)