In their virtual meeting on 14 October 2020, the G20 finance ministers and central bank governors endorsed an updated Action Plan which contained a range of important measures for the ongoing response to the coronavirus pandemic and for shaping the global economic recovery. This includes, in particular, extending the debt freeze for the world’s poorest countries until the end of June 2021.
The suspension of interest payments and repayments as part of the Debt Service Suspension Initiative (DSSI) is designed to give the affected countries more financial room for manoeuvre in combating the coronavirus pandemic. The decision on a further extension of the debt freeze is scheduled for the G20 side meeting at the IMF’s upcoming Spring Meeting in 2021. Given the scale of the impact of the Covid-19 crisis in heavily indebted countries, the G20 recognised that debt treatments beyond the DSSI may be required on a case-by-case basis. The G20 finance ministers and central bank governors have, in principle, agreed on a framework for such additional debt suspensions and are planning to endorse and publish this framework at their next meeting in November.
At the G20 meeting, Germany supported measures for the effective containment of the coronavirus and for the development, manufacturing and global distribution of COVID-19 diagnostics, therapeutics and vaccines as a multilateral response to the crisis. Furthermore, discussions also broached measures to return to a form of growth that is strong, sustainable, balanced and inclusive. The meeting also included discussions of “global stablecoins” as well as possibilities for enhancing cross-border payment arrangements.
Global corporate taxation
The G20 finance ministers and central bank governors also discussed the advances made in reforming global corporate taxation. The G20/OECD Inclusive Framework on BEPS had already unanimously adopted blueprints for both pillars of the reform project and presented them in time for the G20 meeting. German Finance Minister Olaf Scholz stated: “By achieving unanimity on the blueprints to reform global corporate taxation, we have made a huge step forward”. The G20 has stated that it aims to reach an agreement on remaining questions by mid-2021.