The world’s major financial institutions were meeting virtually, under the Italian presidency of the G20, on Friday 26 February, at the time we went to press (see EUROPE 12664/18).
On the taxation of the digital sector, progress has been made in the search for an international solution.
Benjamin Angel, Director of Taxation Services (DG TAXUD) of the European Commission, reported “ strong support” from all G20 Finance Ministers for “an agreement on both OECD pillars by July 2021”, via Twitter. U.S. Treasury Secretary Janet Yellen dropped the call for a voluntary ‘Safe Harbour’ scheme, she reported, saying it was a “new impetus and a real chance to make it!”
While the previous Trump administration had called for a pause in the OECD negotiations (see EUROPE 12509/17), Europeans were waiting for positive signals from the Biden administration.
The day before, Ms Yellen had assured her counterparts that the United States was now committed “to the multilateral discussions on both pillars within the OECD/G20 Inclusive Framework, overcoming existing disagreements and finding workable solutions in a fair and judicious manner”.
Maintaining adequate budget support
The ‘G20 Finance’ was expected to stress the importance of not withdrawing too soon the budgetary support measures for economies still affected by the Covid-19 pandemic.
“Accommodative policy support is needed, with monetary and fiscal policies continuing to work hand-in-hand”, said the President of the European Central Bank, Christine Lagarde, via Twitter. “We must not scale back the support programs too early and too quickly”.
On Friday, at the end of the European Council, the Portuguese Prime Minister, António Costa, called for a “calm” discussion between EU countries by the end of the first half of the year on the need to extend, also to 2022, the freeze on European fiscal rules.
The G20 Finance Ministers were also expected to address the issue of aid to vulnerable countries. In particular, Europeans support the extension of the Debt Service Suspension Initiative (DSSI) beyond 2021 to these countries. (Original version in French by Marion Fontana and Mathieu Bion)