The unprecedented measures to combat the economic recession caused by the coronavirus health crisis will be the focus of the meeting of G20 finance ministers and central banks on Saturday 18 July, the second day of the European Council dedicated to the MFF and the European Recovery Plan.
The action plan to support growth, support for the poorest countries facing difficulties, and tools available from the multilateral financial institutions are on the agenda.
Moratorium on debt servicing. The discussion will focus on the implementation of the Paris Club’s Debt Service Suspension Initiative (DSSI), also endorsed by the G20, in the context of the Covid-19 pandemic.
Ministers will also discuss its potential extension to 2021 and may consider which countries will require debt rescheduling over time (see EUROPE 12503/20), a topic of great concern to development NGOs (see EUROPE 12468/21).
“The economic crisis will continue in 2021 throughout the world. France is calling on the G20 countries to extend the moratorium on debt servicing to give the poorest countries the means to overcome it”, French Minister of Economy, Finance and Recovery Bruno Le Maire said Friday in a statement.
According to the Paris Club’s assessment as on 30 June, 32 countries are eligible (out of the 40 or so that applied for the initiative).
Eighteen of them signed a memorandum of understanding with the Paris Club for a total amount of $1.3 billion (Burkina Faso, Cameroon, Chad, Comoros, Dominica, Ethiopia, Grenada, Guinea, Côte d’Ivoire, Kyrgyzstan, Mali, Mauritania, Myanmar, Nepal, Niger, Pakistan, Republic of the Congo and Togo).
“A consensus is emerging for an extension to 2021. We are hopeful”, said a source from Bercy on Friday, as the subject was discussed this week at the G7.
The decision would be taken at the annual meeting of the Bretton Woods institutions this fall in Washington.
International tax reform. This issue will also be addressed.
“The crisis underscores the urgency of moving forward in OECD discussions by the end of 2020. Given that the digital giants are the big winners in this crisis, the need for a real digital tax is only reinforced”, according to Bruno Le Maire, who cites the subject as France’s second priority for this G20 Finance Summit.
Appeal from civil society. On the eve of this meeting, activists in the global climate movement mobilised to demand a fair and sustainable recovery after the Covid-19 pandemic.
More than 20,000 people signed a petition calling on central banks and G20 countries to invest public money in a fair recovery.
An open letter signed by the leaders of major civil society organisations echoes this message. (Original version in French by Aminata Niang)