Due to deep divisions over the Russian military invasion of Ukraine, the G20 finance ministers were unable to adopt a joint communiqué at their first meeting under the Indian Presidency, held on Friday 24 and Saturday 25 February in Bengaluru.
The document summarising the ministerial discussions endorses two paragraphs from the November 2022 Bali Declaration strongly condemning the war in Ukraine and calling for respect for international law based on the UN Charter, which had been agreed by the G20 leaders, except for the Russian and Chinese leaders (see EUROPE 13064/1).
From Moscow on Saturday, Russian authorities accused the West of destabilising the G20 ‘Finance’ meeting through an anti-Russian and purely confrontational attitude on issues outside the remit of finance ministers.
On the contrary, the Franco-German duo opposed any attempt to backtrack on the Bali Declaration.
On the purely economic issues agreed by all delegations, the G20 ‘Finance’ notes that the economic situation has “modestly improved” since its October 2022 meeting, although growth remains slow and downside risks remain such as high inflation, a resurgence of the Covid-19 pandemic and tighter financing conditions that could exacerbate weaknesses in emerging economies.
In this context, the G20’s major monetary policy makers advocate “agile and flexible” fiscal, socio-economic and monetary policies capable of supporting vulnerable groups in a “temporary and targeted” manner, bearing in mind the sustainability of public finances in the medium term.
The G20 ‘Finance’ group recognises the need to evolve the multilateral development banks due to the more cross-cutting nature of the challenges and the increasing demand for financing and expertise.
Government debt. In their declaration, the ministers recognise “urgency to address debt vulnerabilities in low and middle-income countries”. In their view, “strengthening multilateral coordination by official bilateral and private creditors is needed to address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries”.
"We are looking at more efficient and quick debt resolution considering the fact that countries have to wait for years by which time the (economic) distress there aggravates”, confirmed Indian minister Nirmala Sitharaman, who hosted the meeting.
In addition, the G20 ‘Finance’ group urges the OECD to finalise work on Pillar I of the Digital Giant Tax Reform so that the specific multilateral convention currently being drafted can be signed “in the first half of 2023”.
Other discussions focused on the supervision of crypto-assets, with the Financial Stability Board being asked to make specific recommendations on the regulation of crypto-assets ahead of the third G20 ‘Finance’ meeting in 2023.
See the summary of the Indian G20 Presidency: https://aeur.eu/f/5il (Original version in French by Mathieu Bion)