More than three months after the start of the epidemic, part of China, the G20 member countries gathered at an extraordinary summit to display a united front and try to find a coordinated response to the pandemic that has placed the world economy in lethargy.
After a response in dispersed order to deal with the Covid-19 pandemic which is hitting economies hard, countries are now keen to display a common front. At a virtual emergency summit chaired by Saudi Arabia on Thursday, G20 members announced their intention to inject “more than 5,000 billion dollars” into the world economy to “counter social, economic repercussions and financial consequences of the pandemic “of the new coronavirus. These 5,000 billion will be in the form of fiscal stimulus, loan guarantees, and unspecified measures.
In recent days, each country was trying to provide its own remedy to compensate for the colossal losses caused by the sudden cessation of activity. With a stimulus package of 4,000 billion in liquidity for businesses, the United States, the leading economic power, had taken the lead in emergency measures. In its wake, the Fed even advanced on 300 billion in aid “to support the flow of credits”. On the European side, a global response to the shock had been slow, only to end up with a promise from the ECB and “750 billion buyouts of public debts”. In France, the government communicated on “45 billion euros (which) could (have) evolve according to the situation”.
In addition, of the 5,000 billion, China, from which the epidemic started, “communicates”, alone, on the figure of 344 billion – mainly in fiscal measures. During the meeting, Chinese President Xi Jinping took the opportunity to call on the G20 countries to lower their tariffs, which are the subject of tensions between Beijing and Washington, and to facilitate trade flows.
The role of central banks in question
But for this extraordinary summit, the objective is indeed to display a united front. The leaders present, including Donald Trump, Vladimir Putin, Emmanuel Macron and the other leaders of the G20 member countries display unity: “We are firmly resolved to present a united front against this common threat”, they added.
The 20 largest economies in the world have also announced that they will work with international organizations “to deploy a solid, coherent, coordinated and swift set of financial measures.”
Finally, this G20 called on international institutions, including the World Health Organization (WHO) and the International Monetary Fund (IMF), to “help emerging and developing countries to cope with the health, economic and social shocks of the Covid-19 “.
Still, on these 5 trillion, the press release does not specify if the amount includes the actions of central banks, already committed to extinguish the fire in their respective countries. But it incorporates all the announcements made by governments to support their economic activity.
The global toll of the Covid-19 pandemic has exceeded 21,000 dead and has confined their homes to an unprecedented number of more than three billion people.