Because of Ukraine and Gaza
G20 finance ministers will not agree on final declaration
March 1, 2024, 2:48 a.m
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The meeting of the finance ministers of the G20 countries ends without a joint statement. Host Brazil would have liked to leave the geopolitical conflicts out of the picture, but Germany, among others, is not playing along.
At the end of their talks in Brazil, the finance ministers of the 20 leading industrialized and emerging countries (G20) were unable to agree on a common language for a statement. Federal Finance Minister Christian Lindner told journalists at Sao Paulo airport that, despite intensive efforts, there had been no consensus for a joint communiqué. “It failed because we were unable to agree on a common language to assess the consequences of the war against Ukraine on the global economy. It is unfortunate because this war has significant consequences for global economic development and the poorest people in particular suffer from the consequences Aggression,” said Lindner.
There were also voices at the summit that attempted to equate Russia’s attack on Ukraine, which violates international law, with the humanitarian situation in the Gaza Strip. “That was also unacceptable for many colleagues and for me,” said the minister.
Brazil, which hosted the finance ministers and central bank heads of the G20 group, therefore published its own summary instead of a joint communiqué. “I would also have liked this summary to have clearer language regarding the geopolitical situation and the war against Ukraine. Obviously, the Brazilian presidency has presented its own position more strongly here,” said the Federal Finance Minister.
Brazil didn’t want to discuss wars
The summary released by the Brazilian government cites the economic risks of “wars and escalating conflicts” but urges these to be discussed elsewhere. Brazilian Finance Minister Fernando Haddad told reporters that differences between G20 foreign ministers over regional conflicts the previous week had “contaminated” finance ministers’ talks and scuppered efforts to reach a joint statement. “There was a point where the lack of consensus was so small that it only affected one word,” Haddad said, without giving details.
It was already reported from G20 negotiating circles before the end of the meeting that Russia rejected formulations about the war against Ukraine and wanted to talk about a war in Ukraine. The actions of the Israeli army in the Gaza Strip should not be mentioned by name, which was important to Germany. Instead, we should talk about a humanitarian crisis in the Gaza Strip. As host of the G20 meeting, Brazil actually wanted to exclude these topics and focus on purely economic policy issues. But then geopolitical conflicts overshadowed the deliberations.
Plans for a minimum tax for the super-rich
One of Brazil’s priorities at the G20 deliberations is to reduce inequality in the world. The country plans to present plans for greater taxation of billionaires by July. It is planned to add another pillar to the international tax reform, which consists of two pillars. Super-rich people should then have to pay a minimum tax – similar to larger companies. France has already signaled support for the idea of a minimum tax for the super-rich. Like companies, they could reduce their tax rate and end up paying less than poorer people, said Finance Minister Bruno Le Maire. A minimum tax on billionaires could raise $250 billion annually, according to one study. The 2,700 billionaires in the world have a combined fortune of almost $13 trillion.
Achim Steiner, head of the UN development program UNDP, said that it was already a success for Brazil that there was only one point of contention and that over a few words. Brazil has set clear priorities, for example in tax policy. The reactions to this were different. “In principle, Brazil received a mandate from this meeting to first develop this proposal further.” Even with slightly higher tax rates for the super-rich, considerable additional income could be achieved. It will become clear in July whether Brazil can implement some of its priorities.
Steiner demanded that poorer countries receive more help. “The debt problem and liquidity problem in developing countries is now a crisis scenario.” 50 poorer countries in the world are on the verge of becoming insolvent or are no longer able to continue to service their interest obligations. The sharp increases in interest rates to combat high inflation would have caused an economic crisis in many developing countries. Now it must be a matter of making debt relief or restructuring possible.