Faced with coronavirus, the G20 promises a “united front” and $ 5,000 billion

The twenty leading economic powers have pledged to inject more than 5,000 billion dollars into the economy and to make “common front” against the new coronavirus and the risk of recession, at a virtual and extraordinary G20 summit on Thursday .
The global toll of the Covid-19 pandemic is around 22,000 dead and the disease has led to the confinement of more than three billion people.

The great powers are working to mitigate the effects of this unprecedented situation on their economy.

Under the presidency of King Salman of Saudi Arabia, the summit brought together American heads of state Donald Trump, Russian Vladimir Putin, French Emmanuel Macron and the other G20 leaders who discussed by videoconference the response to be made to the threat of recession.

Faced with a virus “which knows no borders”, the members of the G20 called in their final communiqué to “solidarity”, to “transparency” and to cooperation with international institutions to “restore confidence, preserve financial stability and reviving growth ”.

“We are injecting more than 5,000 billion dollars into the global economy, through targeted tax policies, economic measures and plans to counter the social, economic and financial impacts of the pandemic,” they said.

According to Chinese Foreign Affairs, of the 5,000 billion, China, from which the epidemic started, alone “communicated” the figure of 344 billion, mainly in tax measures.

During the summit, Chinese President Xi Jinping called on his G20 peers to lower their tariffs, which are a source of tension between Beijing and Washington, and to facilitate trade flows.

“Trade wars and sanctions are worsening the recession,” said Putin.

“Unprecedented shock”

On Wednesday, the financial rating agency Moody’s warned that the G20 economies should all be in recession this year due to the pandemic.

Overall, these countries are expected to contract by 0.5% of their gross domestic product (GDP).

“The G20 economies will suffer an unprecedented shock in the first half of the year and will contract throughout the year before rebounding in 2021,” said the agency, which figures this recovery next year. at 3.2% on average.

While several wealthy countries have unveiled colossal stimulus packages, concerns are mounting for poor countries that lack access to capital markets and lack adequate health services.

The G20 called in its press release international institutions, including the World Health Organization (WHO) and the International Monetary Fund (IMF), to “help emerging and developing countries to cope with health, economic and social shocks of the Covid-19 “.

“It is our responsibility to reach out to developing countries (…) by enabling them to build their capacities and improve their infrastructure so that they overcome this crisis and its repercussions,” said the Saudi king. start of the summit.

For Tedros Adhanom Ghebreyesus, head of WHO, the G20 must offer its support to “low and middle income countries”, especially in sub-Saharan Africa. And for the IMF and the World Bank, it must suspend payment of the debts of the poorest countries.

“Warming up”

The summit took place when G20 leaders are more divided than during the summits following the 2008 financial crisis.

On Wednesday, US Secretary of State Mike Pompeo targeted China, saying the G7 had seen Beijing’s “intentional disinformation campaign” about the virus.

Oil prices, depressed by the impact of the epidemic on demand, are at the center of tensions between Moscow and Ryad, the Saudis having carried out the sharpest price cuts in two decades in retaliation for Russia’s refusal reduce production to support prices.

“The lesson that leaders must learn from their meeting is that, once again, international solidarity must be the most important instrument to fight the crisis,” said Markus Engels of the Global Solutions Initiative.

But according to the acting executive director of the NGO Oxfam, Chema Vera, the declaration of the G20 is “not sufficient”, the “richest governments being still in the stage of warming up in the face of the scale of the effort to provide ”. He called for a “truly ambitious plan” especially to support public health infrastructure.

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