G20 warns of risk to global recovery from virus variants

VENICE, Italy —The global economic recovery is at risk from the rise of new coronavirus variants and poor access to vaccines in developing countries, finance ministers of the world’s 20 largest economies warned yesterday.

The G20 gathering in the Italian city of Venice — the ministers’ first face-to-face talks since the start of the pandemic — also endorsed a move to stop multinationals shifting profits to low-tax havens.

That paves the way for G20 leaders to finalise a new global minimum corporate tax rate of 15% at a Rome summit in October, a move that could recoup hundreds of billions of dollars for public treasuries straining under the Covid-19 crisis.

A final communique said the global economic outlook had improved since G20 talks in April thanks to the rollout of vaccines and economic support packages, but acknowledged its fragility in the face of variants like the fast-spreading Delta.

“The recovery is characterised by great divergences across and within countries and remains exposed to downside risks, in particular the spread of new variants of the Covid-19 virus and different paces of vaccination,” it read.

“We reaffirm our resolve to use all available policy tools for as long as required to address the adverse consequences of Covid-19,” it added, noting these should be consistent with preserving stability in prices and public finances.

The communique, while stressing support for “equitable global sharing” of vaccines, did not propose concrete measures, merely acknowledging a recommendation for $50 billion in new vaccine financing by the International Monetary Fund, World Bank, World Health Organisation and World Trade Organization.

“We all have to improve our vaccination performance everywhere around the world,” French Finance minister Bruno Le Marie told reporters. “We have very good economic forecasts for the G20 economies, and the single hurdle on the way to a quick, solid economic rebound is the risk of having a new wave.”

Differences in vaccination levels between the world’s rich and poor remain vast. WHO Director-General Tedros Adhanom Ghebreyesus has called the divergence as a “moral outrage” that also undermines wider efforts to tame the spread of the virus.

While some of the wealthiest countries have now given over two-thirds of their citizens at least one shot of vaccine, that figure falls to well below 5% for many African nations. —