The global economic recovery faces the risk of a new round of rise coronavirus Variations and hard to obtain vaccine In developing countries, the finance ministers of the world’s 20 largest economies issued a warning on Saturday
The G20 meeting in Venice, Italy-the ministers’ first face-to-face meeting since the pandemic began-also approved a measure to prevent multinational companies from shifting their profits to a low-tax haven.
This paved the way for the G20 leaders to finalize a new global minimum corporate tax rate of 15% at the Rome summit in October, which could recover hundreds of billions of dollars in public debt that is strained by the COVID-19 crisis.
A final communiqué stated that due to the introduction of vaccines and economic support programs, the global economic outlook has improved since the G20 meeting in April, but acknowledged its vulnerability in the face of rapidly spreading variants such as the delta.
“The recovery is characterized by huge differences between and within countries, and it still faces downside risks, especially the spread of new variants of the COVID-19 virus and different rates of vaccination,” it wrote.
“We reaffirm our determination to use all available policy tools to address the adverse consequences of COVID-19 within the time needed,” it added, noting that these should be consistent with maintaining the stability of prices and public finances.
Although the communiqué emphasized support for the “global equitable sharing” of vaccines, it did not propose specific measures. It only recognized the US$50 billion new vaccine financing proposal made by the International Monetary Fund, the World Bank, the World Health Organization and the World Trade Organization.
French Finance Minister Bruno Le Marie told reporters: “We must all improve our vaccination performance around the world.” “Our economic forecasts for the G20 economies are very good, and the only obstacle to a rapid and stable economic rebound. It’s a new wave of risks.”
The difference in vaccination levels between the rich and the poor in the world is still very large. WHO Director-General Tedros Adhanom Ghebreyesus referred to this disagreement as “moral brutality”, which also undermined broader efforts to contain the spread of the virus.
Although some of the wealthiest countries have now vaccinated more than two-thirds of their citizens with at least one shot, for many African countries, this number is well below 5%.
Brandon Locke of The ONE Campaign, a public health nonprofit organization, condemned what he called the G20’s inaction, calling it “a win-win situation for everyone”
“It will not only kill the lives of poorer countries, but it will also increase the risk of new variants that will cause severe damage to richer countries,” he said.
Tax avoidance
Reuters statistics on new COVID-19 infections show that they are on the rise in 69 countries/regions, and the daily infection rate has been on the rise since late June, and now reaches 478,000. https://graphics.reuters.com/world-coronavirus-tracker-and-maps/
People are beginning to worry that the spread of Delta variants may hinder economic recovery, especially in countries with low levels of vaccination.
Kristalina Georgieva, managing director of the International Monetary Fund, said that the world is facing a “deteriorating dual-track recovery,” partly due to differences in vaccine supply.
The biggest policy move in the talks was to reach an agreement on global corporate tax rates, which ended an eight-year debate.
The 15% global bottom line is designed to prevent multinational companies from looking around for the lowest tax rate. It will also change the way companies such as Amazon and Google collect taxes, depending in part on where they sell their products and services, rather than where their headquarters are located.
US Treasury Secretary Janet Yellen said that any country that opposes it will be encouraged to sign before October.
“We will work hard to do this, but I should emphasize that not every country is involved,” she said, adding that the agreement includes a mechanism that prohibits the use of tax havens anywhere.
G20 members account for more than 80% of the world’s GDP, 75% of global trade and 60% of the earth’s population, including the United States, Japan, the United Kingdom, France, Germany, and India.
In addition to the EU’s Ireland, Estonia and Hungary, other countries that have not yet signed the agreement include Kenya, Nigeria, Sri Lanka, Barbados, and Saint Vincent and the Grenadines.
Among other problems, the US Congress’s fight against President Joe Biden’s plan to increase taxes on businesses and the wealthy in the United States may cause problems, and the EU’s separate plan to impose a digital tax on technology companies may also cause problems. .
U.S. Treasury officials have stated that the EU plan is inconsistent with broader global agreements, even though the digital tax mainly targets European companies.
