MercoPress. South Atlantic News Agency

G-20 economy ministers fail to reach consensus due to ongoing wars

“As far as the financial track is concerned, there was consensus on everything we discussed. We didn't discuss geopolitical conflicts in our meetings,” Haddad explained

The summit of Economy Ministers of the G-20 in São Paulo failed Thursday to reach a unanimous declaration due to discrepancies over the ongoing armed conflicts in Ukraine and Gaza, it was reported. ”We came very close (...) it was almost by a word,“ Brazil's Fernando Haddad said during a press conference. Brazil, which this year holds the rotating presidency of G-20 wanted to ”leave aside” all geopolitical tensions but to no avail.

“We had hoped that more sensitive issues, related to geopolitics, would be discussed exclusively in the diplomatic arena,” but since at last week's G-20 foreign ministers' meeting in Rio de Janeiro, “no common wording was reached, that ended up contaminating the establishment of a consensus in ours,” Haddad explained. However, there was full consensus on purely “economic issues,” particularly about the fight against growing inequalities, he added, although no agreement was reached on Haddad's idea to tax the super-rich who -according to Haddad- continue to evade taxes through tax havens and legislative loopholes. “There was a very great concern from ministers and central bank governors regarding inequality,” the minister underlined.

“As far as the financial track is concerned, there was consensus on everything we discussed. We didn't discuss geopolitical conflicts in our meetings. This was not brought up for discussion in plenary. And then it becomes very difficult when ministers and central bank presidents don't take part in the discussion to reach a consensus on an issue that wasn't and wasn't dealt with under the financial track,” said the minister.

The United States, France, and Germany made the armed conflicts a central part of their statements at this G20, in contrast to the silence of the emerging countries. On Thursday, German Finance Minister Christian Lindner told journalists that the wars could not be “left aside” and made the approval of the final communiqué conditional on their being mentioned so that “a certain normalization effect does not occur.”

US Treasury Secretary Janet Yellen and French Economy Minister Bruno Le Maire focused on confiscating Russian assets blocked by the West to finance Kyiv albeit from different viewpoints, but the matter was not discussed at the G20 Finance Plenary.

The G20 did agree that inflation is close to being “effectively tamed”, following the escalation of prices worldwide as a result of the impact of the covid-19 pandemic and then aggravated by the war in Ukraine.

In this scenario, the likelihood of a mild slowdown in the global economy has increased, according to a document released by the presidency of the G20 currently held by Brazil in the absence of a joint statement.

Under the title “Chairman's Summary,” the Brazilian document stresses that medium-term growth prospects remain moderate, and global economic growth will stabilize at a lower level, according to most estimates. The main challenge is to establish measures that stimulate economic growth while maintaining sustainable budgets and creating reserves.

“We reiterate the need for well-calibrated and communicated fiscal, monetary, financial and structural policies to promote strong, sustainable, balanced and inclusive growth, maintain macroeconomic and financial stability and help limit the negative repercussions [of the global slowdown],” the report noted.

“Inflation has declined in most economies, thanks largely to appropriate monetary policies, the reduction of bottlenecks in the supply chain, and the moderation of commodity prices,” it also pointed out.

From 2021 to 2023, global inflation accelerated, driven by the strangulation of global production chains, because of restrictions on Covid-19 imposed by China, and the start of the war between Russia and Ukraine, it also explained.

“The ministers exchanged views on ongoing wars, conflicts, and humanitarian crises, highlighting Ukraine and Gaza. The Brazilian presidency of the G20 noted that the finance track is not the most appropriate forum for resolving geopolitical issues and proposed that these issues continue to be discussed in relevant forums and meetings,” the Brazilian document elaborated.