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Virus variants threaten global recovery, G20 warns

EconomyJul 11, 2021 03:56AM ET
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2/2 © Reuters. FILE PHOTO: Russian billionaire Andrey Melnichenko's 394-foot (120-metres) mega-yacht "A" is seen berthing at a pier against the "Reflections at Keppel Bay" condominium in Singapore April 18, 2012. REUTERS/Tim Chong/ 2/2

By Gavin Jones and Leigh Thomas

VENICE, Italy (Reuters) -An upsurge in new coronavirus variants and poor access to vaccines in developing countries threaten the global economic recovery, finance ministers of the world's 20 largest economies warned on Saturday.

The G20 gathering in the Italian city of Venice was the ministers' first face-to-face meeting since the start of the pandemic. Decisions include the endorsement of new rules aimed at stopping multinationals shifting profits to low-tax havens.

That paves the way for G20 leaders to finalise a new global minimum corporate tax rate of 15% at a Rome summit in October, a move that could recoup hundreds of billions of dollars for public treasuries straining under the COVID-19 crisis.

A final communique said the global economic outlook had improved since G20 talks in April thanks to the rollout of vaccines and economic support packages, but acknowledged its fragility in the face of variants like the fast-spreading Delta.

"The recovery is characterised by great divergences across and within countries and remains exposed to downside risks, in particular the spread of new variants of the COVID-19 virus and different paces of vaccination," it read.

While G20 nations promised to use all policy tools to combat COVID-19, the Italian hosts of the meeting said there was also agreement to avoid imposing new restrictions on people.

"We all agree we should avoid introducing again any restriction on the movement of citizens and the way of life of people," said Italian Economy Minister Daniele Franco, whose country holds the rotating G20 presidency through to December.

The communique, while stressing support for "equitable global sharing" of vaccines, did not propose concrete measures, merely acknowledging a recommendation for $50 billion in new vaccine financing by the International Monetary Fund, World Bank, World Health Organization and World Trade Organization.

Differences in vaccination levels between the world's rich and poor remain vast. WHO Director-General Tedros Adhanom Ghebreyesus has called the divergence a "moral outrage" that also undermines wider efforts to tame the spread of the virus.

While some of the wealthiest countries have now given over two-thirds of their citizens at least one shot of vaccine, that figure falls to well below 5% for many African nations.

Brandon Locke, of the public health non-profit group ONE Campaign, decried what he described as the G20's inaction, calling it "a lose-lose situation for everyone."

"Not only will it cost lives in poorer countries, it increases the risk of new variants that will wreak havoc in richer ones," he said.

Italy said it the G20 would return to the issue of vaccine funding for poor countries ahead of a Rome summit in October and that new variants was an area that needed to be looked at. It did not give further details.

"We must agree on a process for everyone on the planet to be able to access vaccines. If we don't, the IMF predicts that the global economy will lose $9 trillion," religious development organization Jubilee USA Network said.

It was referring to an IMF forecast that international cooperation on COVID-19 vaccines could speed world economic recovery and add $9 trillion to global income by 2025.

TAX HOLDOUTS

A Reuters tally of new COVID-19 infections shows them rising in 69 countries, with the daily rate pointing upwards since late-June and now hitting 478,000. https://graphics.reuters.com/world-coronavirus-tracker-and-maps

IMF Managing Director Kristalina Georgieva said the world was facing "a worsening two-track recovery" partly driven by the differences in vaccine availability.

The biggest policy initiative at the talks was a well-flagged agreement on the global corporate tax rate, capping eight years of wrangling on the issue.

Setting a floor of 15% is intended to stop multinationals shopping around for the lowest tax rate. It would also change the way that companies like Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL) are taxed, basing it partly on where they sell products and services, rather than on the location of their headquarters.

U.S. Treasury Secretary Janet Yellen said any countries opposed to it would be encouraged to sign up by October.

"We'll be trying to do that, but I should emphasise it's not essential that every country be on board," she said, adding the deal included mechanisms against the use of tax havens anywhere.

G20 members account for more than 80% of world gross domestic product, 75% of global trade and 60% of the population of the planet, including big-hitters the United States, Japan, Britain, France, Germany and India.

In addition to European Union holdouts Ireland, Estonia and Hungary, other countries that have not signed on include Kenya, Nigeria, Sri Lanka, Barbados and St. Vincent and Grenadines.

EU Economy Commissioner Paolo Gentiloni told reporters there were still discussions about what level of a company's profits should be taxed at national level, and whether other sectors beyond financial services and mining should be exempt.

Among other sticking points, a fight in the U.S. Congress over President Joe Biden's planned tax increases on corporations and wealthy Americans could cause problems, as could a separate EU plan for a digital levy on tech companies.

The G20 officials called on the International Monetary Fund "to quickly present actionable options" for rich countries to channel part of a $650 billion issuance of IMF currency reserves to poorer countries.

They stopped short of endorsing the IMF's $100 billion target for transferring Special Drawing Rights to countries in need, but called for contributions from all able countries to reach "an ambitious target."

Virus variants threaten global recovery, G20 warns
 

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Comments (16)
Roger Miller
Roger Miller Jul 11, 2021 10:42AM ET
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Central planners hard at work, should result in a much better world, as always.
Mart Bab
Rubberduck1973 Jul 11, 2021 7:45AM ET
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I can see below the COVID not-cases are still at it. You can conspire what you want. It only goes to show your lack of intelligence
Alex Malmstrom
Alex Malmstrom Jul 11, 2021 7:45AM ET
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Judging others' supposed lack of intelligence with poor grammar is not exactly a testament to your own alleged intelligence. But then again, an empty barrel rattles the most!
Rick Baier
Rick Baier Jul 11, 2021 6:40AM ET
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Forex harbinger so true your post is100 percent spot on. China did kill 100 million of their own citizens after disarming them. So it not a stretch at all to go with lab produced virus....
St Af
St Af Jul 11, 2021 4:20AM ET
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In Post Office, THERE'S ALWAYS ANOTHER DAY. In Politics, THERE'S ALWAYS ANOTHER YEAR. Let's Go Bull !
norm dean
norm dean Jul 10, 2021 8:47PM ET
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A pandemic so "scary and transmissible" that the government has to send people door to door to try and convince people to be scared of it....Democrats: "OMG COVID is so scary and transmissible especially the new delta variant, you can even get it and spread it if you have been vaccainted with the super duper safe and effective vaccainte that only gives some people clots and heart inflammation!" Also democrats: "Let's send people door to door to spread the virus because clearly people who did not get the vaccine simply are unaware the vaccine exists and need somebody to come and tell them to their face on their personal property like the gestapo! COVID is totally about the science and not about politics!"
Jouni Matero
Jouni Jul 10, 2021 8:47PM ET
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US is the only country on the world where people think covid is just about politics, probably because Mr T said it's fake news in the beginning. Everywhere else covid has strengthened connections and sympathy between ppl but in US it has just torn ppl further away from each other. "America first" is one BIG joke.
Rick Baier
Rick Baier Jul 10, 2021 4:21PM ET
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Lol. This article has no friends here . The population is awake.
John Avenetti
John Avenetti Jul 10, 2021 3:47PM ET
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Lies. Complete lies to usher in a one world currency and create a medical dictatorship. I personally know many people who have died and gotten blood clots from these vaccines. don't you find it odd Bill Gates left MSFT the month the pandemic started to become to vaccine spokesperson after he said vaccines would be used to decrease population during his Ted talk in 2010? anyone? anyone?
Martin Lewis
Martin Lewis Jul 10, 2021 1:26PM ET
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The risk is not from the virus, never has been, it is from the government response to the virus. Remember when they ended lockdowns in Texas and Florida and ended mask mandates and Biden called it "neanderthal thinking" and places like California and New York remained closed with mask mandates and then Texas and Florida did so much worse than California and New York? Oh right, that never happened, Texas and Florida did just fine and California and New York have actually done worse. Not to mention crime is up massively - including massive spike in homicides - in blue states too.
Dave Jones
Dave Jones Jul 10, 2021 1:26PM ET
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well put
John Avenetti
John Avenetti Jul 10, 2021 1:26PM ET
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100000%
ZS Beck
ZS Beck Jul 10, 2021 1:26PM ET
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There are way more people on the street in Cali and NY. You can't compare those states where nobody walks on the street.
Forex Harbingers
Forex Harbingers Jul 10, 2021 1:26PM ET
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Youre kidding right? Houston, San Antonio, Miami, etc. These states are not all rural and contain high population density cities, that should be just as at risk. There is plenty of both NY and Cali that are rural as well. So, the comparisons remain valid
Forex Harbingers
Forex Harbingers Jul 10, 2021 1:26PM ET
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Mind you, Im speaking of population density, the true statistic to risk factor. And they all rank in the same 15k-25k per sq m.
Forex Harbingers
Forex Harbingers Jul 10, 2021 12:53PM ET
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The fear campaign won't end until we stand up to it.
Martin Lewis
Martin Lewis Jul 10, 2021 12:53PM ET
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Last Thursday in California - who has had the strictest lockdowns and some of the highest vaccination rates - reported that there were 9 cases of COVID among Capitol employees, 4 of the 9 were vaccinated. Just keep shifting the goal post as the narrative falls apart: "Masks and the vaccine is super effective and stops the spread and are super duper safe"...."okay masks do not really stop the spread by a lot, maybe two masks will work...also you can still get and transmit the virus even if you are vaccinated...oh and it only causes a little blood clots and heart inflammation"...etc etc...*next month* "okay maybe wear 7 masks and get a mixture of all the vaccines and you will have a 10% less change of getting a virus less deadly than the common flu...and they only cause a few strokes and a little cancer"
Leon Kelly
Leon Kelly Jul 10, 2021 12:30PM ET
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Tax increase priced in
BTC price reminder
BTCpricereminder Jul 10, 2021 12:17PM ET
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they can put taxes up their a....- avoid govts like the plague
jason xx
jason xx Jul 10, 2021 12:08PM ET
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Funny how they always announce this stuff on weekends when retail can't get in or out....
Rick Baier
Rick Baier Jul 10, 2021 12:08PM ET
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We can figure out how to split atoms to produce power. We can figure out if this was produced in a lab. And when we do let me suggest a public hanging ceremony.
jason xx
jason xx Jul 10, 2021 12:08PM ET
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So stupid, If China released a lethal virus (for what first of all) why would they release it on Themselves???
Forex Harbingers
Forex Harbingers Jul 10, 2021 12:08PM ET
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You mean the same country that a point in history killed over 100 million of their own citizens after they disarmed them? Such a stretch
Felipe Daniel
Felipe Daniel Jul 10, 2021 11:45AM ET
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No mention of China, let them cheat right.
Klaus Weyers
Klaus Weyers Jul 10, 2021 9:31AM ET
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sounds like collusion and price fixing among governments to me.. Biden just signed a flaky competition ex. order.. whatever happened to tax competition and the power of free markets?
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jason xx
jason xx Jul 10, 2021 9:31AM ET
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Yup and they are also free to get bailed out when thier embezzling crashes the economy.
jason xx
jason xx Jul 10, 2021 9:31AM ET
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Tony Huynh The only people against this are the tax evaders and thier lobbyists
Tony Huynh
Tony Huynh Jul 10, 2021 9:31AM ET
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New Jazenevd, lol what do you mean I avoided the question? I say that I'm happy about the tax increase. I'm not a corporation, and I'm already paying higher percentage taxes than them. So this is just to even the playing field for all the small businesses who can't evade taxes.
Thuan Bui
Thuan Bui Jul 10, 2021 9:31AM ET
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Free market? Have you seen stocks these days (and probably before too)? Anything but free Market
Thomas Colton
Thomas Colton Jul 10, 2021 9:31AM ET
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Tony Huynh im willing to bet you paid much less than you think in NET taxes. How much did you get in return from the IRS?
New Jazenevd
New Jazenevd Jul 10, 2021 7:34AM ET
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Raising taxes is something that all fascist regimes readily agree on.
Bright Heflide
Bright Heflide Jul 10, 2021 7:34AM ET
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love
 
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