The G7 designs a ‘unified’ recovery that avoids the failures of the recent crisis

This content was published on Jun 11, 2021 – 4:51 PM

Guillermo Ximenis

Falmouth (UK), June 11 (EFE). One of the key economic goals set by the G7 leaders at the Cornwall (UK) summit is to design a strategy that will allow for a “united” recovery and avoid the failures that occurred after the 2008 recession.

Leaders of the planet’s most advanced democracies on Friday devoted the meeting’s first plenary session to discussing plans to rebuild a “better” world once the health crisis that has kept the planet under control for more than a year has been overcome.

Despite confidence that the economy will “rebound strongly” once restrictions are lifted to reduce contagion, there are concerns that the financial turmoil that has plagued since the start of 2020 will leave “permanent scars”, the British prime minister warned. Boris Johnson, event host.

In his inaugural address at the summit, his first in person in two years, the UK Prime Minister highlighted the need for measures to prevent the inequalities that have favored the pandemic becoming chronic in the coming years.

The President of the United States, Joe Biden, whose government has expressed support for those plans that favor an economic recovery that benefits “middle class” and “working families” around the world, agrees with this vision.

New green economy

The group of industrialized countries also sees post-pandemic reconstruction as an opportunity to move toward a more sustainable economy that facilitates the achievement of climate goals for the coming decades.

A “cleaner and greener” system would not only be a “solution to climate change” but also a way to create millions of “highly skilled” and “high-wage” jobs. And I think the citizens of our countries want us to focus on that.”

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A new transatlantic agreement signed by the United States and the United Kingdom this week underscores the commitment of both countries to move in this direction. “We are committed to continuing to build an inclusive, equitable, climate-friendly and sustainable global economy,” the text reads.

Maintain financial support

Leaders assembled in Cornwall agreed on the need to maintain economic support policies in place in the face of the pandemic for as long as necessary, and these days measures are being discussed to increase support for developing countries.

Among those plans, on the table are to expand the so-called Special Drawing Rights (SDR), an instrument of the International Monetary Fund (IMF) designed to create liquidity and increase the resources available in countries with financial needs.

The United States has proposed that the additional package of resources channeled through this program amount to $100 billion (€82.6 billion).

The US administration has described that the money should be used to cover “health needs”, including vaccination programs, and to ensure a “greener”, “strong” and “inclusive” recovery.

reform the tax system

This weekend, the G7 leaders will support the agreement reached by their finance ministers to advance reform of the global tax system that imposes a minimum tax of 15% on companies.

Biden, who is attending his first international appointment since joining the White House, emphasized that this was an essential step to avoid competition between states to cut taxes on large corporations that had harmed “labor protection, infrastructure investment, and growth.” of the middle classes” in the last decade.

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This measure goes hand in hand with the plan to require companies to pay their tax contribution in the countries where they make profits.

In this regard, Biden stressed the importance of applying this principle to all “large multinationals” and not just to the technology sector: “This is an important principle for the United States,” says the American, who trusts “pluralism.” To improve conditions around the world . EFE

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