Due to continued macroeconomic uncertainties as a result of the Covid-19 pandemic, Europeans say they are ready to extend the G20/Paris Club Debt Service Suspension Initiative (DSSI) for vulnerable countries “until the end of 2021”, according to the position that EU G20 countries will defend at the G20 Finance meeting to beheld on Wednesday 7 April.
“We stand ready to further extend the DSSI until end 2021”, according to the terms of reference approved by the Member States’ ambassadors to the EU on Wednesday 31 March.
Beyond the DSSI, Europeans also support the possible extension of the common framework for debt treatment to middle income countries, while stressing that priority should be given to low income countries (see EUROPE 12602/5).
In terms of budgets, Europeans have maintained their policy line that as long as the pandemic continues, Member States should maintain broad support for sectors affected by the economic crisis. This implies an expansionary position in 2021 and 2022, according to the Eurogroup (see EUROPE 12678/5). Once economic recovery is broadly in place, this emergency aid should gradually evolve into temporary and targeted support to stimulate economic recovery, including investments made in green and digital transitions.
Regarding the taxation of the digital sector, “the absolute priority” must be to reach an international agreement on the two pillars of the reform, which should take place “by mid-2021 at the latest”, emphasised the Europeans.
They are also pleased to see the revival of international work on sustainable finance, with a proposal by the current Italian Presidency of the G20 to formalise the dedicated working group. “We would support the development of an international standard that would cover the full width of sustainability, based on the same materiality approach adopted in the EU”, they said.
See the EU position: https://bit.ly/3wgK1lC (Original version in French by Mathieu Bion)