G20 leaders to inject $5 trillion into global economy in fight against coronavirus

Leaders of the Group of 20 major economies pledged on Thursday to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus and “do whatever it takes to overcome the pandemic.” Showing more unity than at any time since the G20 was created during the 2008-2009 financial crisis, the leaders said they committed during a videoconference summit to implement and fund all necessary health measures needed to stop the virus’ spread.

“The G20 is committed to do whatever it takes to overcome the pandemic,” along with the World Health Organization and other international institutions, they said. Their statement contained the most conciliatory G20 language on trade in years, pledging to ensure the flow of vital medical supplies and other goods across borders and to resolve supply chain disruptions. But it stopped well short of calling for an end to export bans that many countries have enacted on medical supplies, with the G20 leaders saying their responses should be coordinated to avoid “unnecessary interference.”

“Emergency measures aimed at protecting health will be targeted, proportionate, transparent, and temporary,” they said. The G20 leaders also expressed concern about the risks to fragile countries, notably in Africa, and populations like refugees, acknowledging the need to bolster global financial safety nets and national health systems.

U.S. President Donald Trump said later the videoconference showed “tremendous spirit to get this over with.” He told a White House news briefing on the coronavirus that the G20 countries were keeping each other informed about their efforts to fight the crisis. “We’re handling it a little bit in different ways but there is great uniformity,” Trump said. Trump and French President Emmanuel Macron agreed in a call on Thursday on the importance of cooperation through the G20 and other groupings to help international organizations “eliminate the pandemic quickly and minimize its economic impact,” the White House said.

The meeting displayed little acrimony despite an oil price war between Saudi Arabia and Russia, an observer to the meeting said. “Everyone realizes that it is essential to preserve jobs, and to maintain trade flows, not disrupt the supply chains,” said one Brazilian government official with knowledge of the videoconference discussions.

No country advocated “total confinement,” mainly because most of the countries in G20 are not implementing such moves, the official added.

IMF Managing Director Kristalina Georgieva plans to ask the Fund’s steering committee on Friday to consider doubling the current $50 billion in emergency financing available to help developing countries deal with the virus, a source familiar with the plans told Reuters.

To boost global liquidity, Georgieva also asked G20 leaders to back a Fund plan to allow member countries to temporarily draw on part of its $1 trillion in overall resources to boost liquidity. The IMF made a similar move in 2009 with a $250 billion allocation of Special Drawing Rights, its internal unit of currency. Georgieva gave no specific number in her statement, but observers to the G20 meeting said an SDR allocation of up to $500 billion could be needed.

G20 leaders to inject $5 trillion into global economy in fight against coronavirus, Reuters, Mar 27