G20 fails to reach consensus amid debate

SAO PAULO — Finance leaders from the world’s largest economies failed to agree on a joint statement as they wrapped up talks on Thursday, with divisions over the conflicts in Gaza and Ukraine overshadowing efforts to forge a consensus on global economic development.

Brazil, which hosted finance ministers and central bank chiefs from the Group of 20 major economies, issued its own summary in lieu of a shared communique. India took a similar tack in its G20 presidency last year.

Brazil’s summary, in line with a draft communique seen by Reuters on Tuesday, cited the economic risks of “wars and escalating conflicts”, but urged debate on them in other venues. It also noted higher odds of a “soft landing” for the global economy, which would cool inflation without a major recession.

Brazilian Finance Minister Fernando Haddad told journalists that differences among G20 foreign ministers discussing regional conflicts the week before had “contaminated” talks on the financial track, spoiling efforts to reach a joint statement.

G20 officials debated late into the night and down to the final hours of the meeting on how to describe the conflicts in a joint communique, with Russia and major Western nations at loggerheads over the language, according to people familiar with the matter.

Those geopolitical tensions ran throughout the two-day meeting, at times overshadowing the formal agenda, such as discussion of a global minimum wealth tax on the ultrarich proposed by Brazil.

The G7 group of rich Western nations and Japan backed the idea of referring to the conflict “on” Ukraine, while Russia wanted to describe it as the conflict “in” Ukraine, said two people familiar with the matter.

G7 countries also backed language describing the conflict in Gaza as a “humanitarian crisis” with no mention of Israel, the sources said.

Brazilian officials hosting the event had tried to focus talks on economic cooperation to tackle issues such as climate change and poverty, but countries including Germany pushed for a joint statement mentioning both conflicts.

Despite tensions hanging over the meeting in Sao Paulo, Achim Steiner, head of the United Nations Development Programme, called the start of Brazil’s presidency this year a success, as the only contention of the second day of finance track talks was “over a few words” in a joint statement.

“Brazil had set clear priorities, for example, with their tax proposal,” Steiner told Reuters on Thursday.