The G20 has decided to use all the tools to contain the pandemic, save jobs and income

Economic news

Jan Strupczewski

Andrea Shalal

BRUSSELS / WASHINGTON (Reuters) – G20 nations are determined to continue doing everything possible to contain the COVID-19 pandemic, warning in a draft of the communiqué that the remains of a global economic recovery “erratic, highly uncertain and subject to downside high risks “.

Bringing the pandemic under control is key to supporting a global economic recovery, G20 leaders said in the draft, excerpts of which were viewed by Reuters.

A joint final statement will be released by leaders from the United States, China and other groups of 20 nations after they met via video conference on Saturday.

In the draft, leaders noted that the coronavirus crisis has hit the most vulnerable in society the hardest and said some countries may need debt cancellation beyond a temporary moratorium on official debt payments that is now expected to end in June 2021. .

G20 leaders said they would decide next spring whether to extend the freeze, the debt suspension initiative, for another six months, and approved a common framework for debt restructuring worked out with the Official Creditors Club Paris.

“We are determined to continue to use all available policy tools for as long as necessary to safeguard people’s lives, jobs and incomes, support global economic recovery and improve the resilience of the financial system, safeguarding ourselves from downside risks” , the statement states.

TRANSPARENCY

The draft states that both borrowers and creditors should be more transparent about public and private debt and urged private sector creditors to take part in the G20 debt relief effort.

World Bank President David Malpass told G20 financial officials on Friday that some countries may need legislative changes to push private sector creditors to participate. “Given the severity of the crisis, we need to move forward with the debt cancellation processes now,” he said.

The draft communiqué also expressed support for a push by the International Monetary Fund to explore additional tools to address the needs of countries as the crisis evolves and to address the “particular challenges faced by small developing states” .

This could be good news for some middle-income countries that have been hit hard by the pandemic, the collapse of tourism and, in some cases, lower commodity prices.

The US Treasury Department said last week that it was willing to extend the common G20 framework to include middle-income countries and small island states, but this view was not shared by all G20 members.

Eric LeCompte, executive director of Jubilee USA Network, said the G20 has made great strides in addressing the incredible debt burden of many countries. “It shows the growing understanding of how serious the crisis is and how serious it can get,” he said.

US President-elect Joe Biden, a Democrat, is likely to take a more cooperative global stance after taking office on January 20, economists say. It should bring the US back into the Paris climate treaty and reverse outgoing President Donald Trump’s threats to step down from the World Health Organization.