Finance ministers and central bankers from the world’s Group of Seven richest nations met virtually on Friday to discuss pandemic fallout, climate change and digital taxation, with the new US administration pledging to rebuild bridges with its allies.
Britain’s finance minister, Rishi Sunak, who will co-chair the talks, wants the meeting to send a fresh signal that trillions of dollars of stimulus from G7 members will not be scaled back while Covid-19 vaccinations are still ramping up.
US Treasury Secretary Janet Yellen will join her counterparts for the online discussions with her boss, President Joe Biden, proposing a further $1.9 trillion in post-Covid rescue spending and tax cuts at home, on top of Trump’s $4 trillion.
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The meeting, which will also include leaders from Canada, France, Germany, Italy and Japan, will see another attempt to agree a global approach to taxing giant digital firms, many of them American such as Amazon, Facebook and Google.
Biden’s administration has expressed support for a proposed global tax on the digital giants.
“The post-pandemic world is going to look different and it’s right that we work together to find a global agreement on how profits are taxed for online companies to level up the playing field,” a UK Treasury source said.
G7 nations will also consider whether to use the IMF to mobilise $500 billion in aid to the world’s poorest nations in response to the Covid-19 pandemic, a source said.
IMF CURRENCY
The G7 was also likely to help low-income countries raise funds to fight the pandemic by backing a new allocation of the International Monetary Fund’s own currency.
The United States, the IMF’s dominant shareholder, is open to a new issuance of $500 billion in what would be another shift from the Trump administration’s stance, sources said.
Trump threw the G7 into chaos in 2018 when he said he was backing out of a joint communique after a leaders’ summit because of a trade dispute with Canada.
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