Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

G20 finance officials to meet on pandemic measures, U.S. global minimum tax plan

EconomyApr 07, 2021 01:26AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: IMF news conference ahead of the World Economic Forum (WEF) in Davos 2/3

By Andrea Shalal

WASHINGTON (Reuters) - Finance officials from the Group of 20 major economies are poised to back a $650 billion boost in the IMF's emergency reserves on Wednesday and extend a freeze on debt payments as part of an effort to help developing countries still struggling to combat the COVID-19 pandemic.

The G20 gathering, taking place virtually on the sidelines of the spring meetings of the International Monetary Fund and World Bank, will also give U.S. Treasury Secretary Janet Yellen a chance to press for a global minimum tax on corporate profits.

The IMF on Tuesday raised its 2021 global growth forecast to 6%, reflecting a rapidly brightening outlook for the U.S., but it warned that emerging market economies were lagging advanced economies. Pointing to a dramatic divergence between the outlook for the United States and much of the rest of the world, it said the pandemic threatened to reverse years of progress in reducing poverty.

IMF Managing Director Kristalina Georgieva told an event with Yellen and World Bank President David Malpass that richer countries should ensure low-income countries received coronavirus vaccinations for the sake of everyone. "We have no way to get through (this) without pulling together," she said.

Expanding the IMF's reserves, or Special Drawing Rights, would boost liquidity for all members, without adding to the debt burden of the 30-some countries already in or facing debt distress, finance officials and economists said.

Extending the current freeze on debt service payments by the poorest countries could provide billions of dollars for them to spend on vaccines and stimulus, Malpass told reporters on Monday.

More than 250 faith groups and non-profit organizations urged G20 leaders, the White House and the IMF to go beyond the moratorium on debt payments and expected SDR allocation to actually cancel debt and expand debt relief for developing countries, in a letter to be delivered on Wednesday.

G20 officials are also expected, at Yellen's wish, to remove a reference in the communique to stable exchange rates first inserted by the former Trump administration, reverting to phrasing that emphasizes the importance of underlying fundamentals, said one source familiar with the discussions.

Yellen had told U.S. senators during her confirmation hearing that the value of the dollar should be determined by markets, a break from former President Donald Trump's desire for a weaker currency.

Taxes will also be a key item on the G20 agenda after Yellen this week pledged to work on a global corporate minimum tax rate, which Germany and France said could ease the way to reaching a landmark deal by mid-year.

Negotiators are racing to reach agreement among more than 140 countries for updating the rules for taxation of cross-border commerce for the first time in a generation.

It was unclear what progress G20 finance leaders may be able to make in tax discussions on Wednesday.

Communique language drafted earlier this week and seen by Reuters was inconclusive: "We will continue our cooperation for a globally fair, sustainable and modern international tax system," G20 officials wrote, adding they remain committed to reaching consensus by mid-2021.

Irish Finance Minister Paschal Donohoe on Tuesday voiced concerns about how a global minimum rate would affect a smaller economy such as Ireland's, which chose a low-tax model to attract international investment.

G20 finance officials to meet on pandemic measures, U.S. global minimum tax plan
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email