G7 chiefs of finance discuss how economies can be steered out of the crisis

© Reuters. FILE PHOTO: UK Treasury Secretary Rishi Sunak speaks at the House of Commons in London

By William Schomberg and David Milliken

LONDON (Reuters) – CFOs from rich countries discussed ways to get the world economy out of its worst slump since the Great Depression and agreed on the need to resolve a tax dispute that has become a test case for US reintegration under the new president is Joe Biden.

The UK, which will chair the Group of Seven Developed Nations this year, also called for more support to the most vulnerable countries during the coronavirus pandemic.

“Ministers and central bank governors exchanged views on how best to shape and respond to the phases of the global recovery from COVID-19, including helping workers and businesses cope with the pandemic and ensuring sustainability over the long term,” said the UK Treasury said.

Italian Economy Minister Roberto Gualtieri said the G7 had committed to continuing to take coordinated action in support of the economy. “The withdrawal of political support is premature,” he wrote on Twitter.

U.S. President Biden has proposed additional spending and tax cuts of $ 1.9 trillion, on top of the $ 4 trillion anti-coronavirus measures adopted by his predecessor Donald Trump.

UK Treasury Secretary Rishi Sunak is expected to say next month that he will extend his economic bailout programs and that public finances setting will have to be addressed later.

The UK said G7 officials agreed that progress in achieving an “international solution to the tax challenges of the digital economy” was a key priority.

Countries have tried to revive attempts at a global approach to taxing huge digital companies, many of which are Americans like Amazon (NASDAQ 🙂 and Google (NASDAQ :), after the progress blocked by Trump’s administration.

The UK called on the G7 countries to agree on a common approach to taxing internet giants by mid-2021, a deadline agreed by the broader group of 20 nations.

Sunak stressed “the moral, health and economic reasons” for the global spread of vaccines, saying international financial institutions need to help vulnerable countries respond to the pandemic.

The G7 were expected to support a reallocation of the International Monetary Fund’s own currency, known as Special Drawing Rights, to help low-income countries hit by the coronavirus crisis.

Officials from the United States, the IMF’s largest shareholder, had signaled that they were open to a new issue of $ 500 billion, sources said Thursday – another position shift by the Biden administration.

Sunak urged private creditors to provide debt relief to the poorest countries, saying that climate change and conservation would be priorities for Britain’s G7 presidency.

World Bank President David Malpass said the G7 had a “good discussion” on inequality, COVID-19 vaccinations, climate change, economic vulnerability and deleveraging for poor countries.

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