The debt crisis dominates the meeting of the big money of the G20

G20 finance and central bank ministers began discussions on Monday on debt restructuring deals, multilateral banking reform and climate change financing, aimed at supporting a faltering global economy. .

Indian Finance Minister Nirmala Sitharaman, who chairs and hosts the meeting in Gandhinagar, in the western state of Gujarat, opened the debates by reminding financial leaders that they had “the responsibility to guide the economy towards strong, sustainable, balanced and inclusive growth”.

One of the key items on the agenda over the two days will be to “facilitate consensus on intractable issues related to rising indebtedness”, Ms Sitharaman said earlier on Monday, speaking to the press alongside by Janet Yellen, Secretary of the Treasury of the United States.

Discussions will also focus on “crucial global issues such as strengthening multilateral development banks and adopting coordinated climate action”, Ms Sitharaman added.

Ms Yellen also spoke of efforts to tackle the over-indebtedness of the world’s poorest countries, noting the progress made in debt restructuring in Zambia, which she had discussed during her visit to Beijing this month. .

China, the world’s second-largest economy and the biggest financial backer to several struggling, low-income Asian and African countries, has so far resisted adopting a common multilateral position on the issue, officials said.

Janet Yellen, on the sidelines of the G20 talks on Sunday, stressed that the agreement with Zambia had taken “too long to negotiate” and added that she hoped that the treatment of that of Ghana and Sri Lanka could be “finalized quickly”.

“We should apply the common principles that we adopted in the Zambia case to other cases, rather than starting from scratch each time,” Ms Yellen said.

According to a senior official from India, which chairs the G20, Beijing did not react in a very encouraging way on the question of the common debt.

Several struggling economies after the twin shocks of the coronavirus pandemic and the aftermath of Russia’s war in Ukraine (which is affecting global fuel and commodity prices) are “reaching a breaking point”, the official added.

Beijing is a major creditor in some of these cases and has been criticized for its stance on restructuring their debt.

– The cost of climate change –

The G20 will also discuss the reform of multilateral development banks, the regulation of cryptocurrencies and the need to facilitate the access of the poorest countries to financing aimed at mitigating the effects of climate change and adapting to it. .

“In the countries of the North, climate change is synonymous with reducing emissions” of CO2, declared Ajay Banga, the new president of the World Bank, in a column published this week in the run-up to the meeting.

“But in the Global South, it’s a matter of survival,” he continued, “because hurricanes are more violent, heat-resistant seeds are scarce, drought destroys farms and towns, and floods wash away decades of progress.”

The first stage of an agreement on a fairer distribution of tax revenues from multinational companies, reached last week by 138 countries, is also expected to be implemented.

Multinationals, especially technology companies, are currently able to easily shift their profits to low-tax countries, even if they do only a small part of their business there.

However, developed G7 members fear the focus on the Russian invasion could derail the final deal, although Ms Yellen said on Sunday she “rejected the idea of ​​a barter” between aid Ukraine and the one dedicated to developing countries.

On Sunday, Japanese Finance Minister Shunichi Suzuki “reconfirmed the G7’s unwavering support” for Ukraine, adding that Moscow will also have to “pay the long-term reconstruction costs”.

Any discussion of support for Ukraine is somewhat uncomfortable for G20 host India, which has so far failed to condemn the Russian invasion, despite being a member of the Quad alliance alongside the Australia, the United States and Japan.