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

RIYADH/WASHINGTON (Reuters) – 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.

“We are strongly committed to presenting a united front against this common threat,” the G20 leaders said their statement.

Saudi Arabia, the current G20 chair, called the video summit amid earlier criticism of the group’s slow response to the disease. It has infected more than 500,000 people worldwide, killed almost 24,000, and is expected to trigger a global recession.

Saudi King Salman, in opening remarks, said G20 countries should resume the normal flow of goods and services, including vital medical supplies, as soon as possible to help restore confidence in the global economy.

The group said it was “injecting over $5 trillion into the global economy, as part of targeted fiscal policy, economic measures and guarantee schemes” to blunt economic fallout from the pandemic.

The amount is about the same as G20 countries injected to prop up the global economy in 2009. But a U.S. relief bill is pledging $2 trillion in fiscal spending, more than double its commitment from that crisis.

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.

PLEDGE OF JOINT ACTION

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.

While the group pledged joint action, the leaders’ statement lacked the urgency of the 2009 effort, said Mark Sobel, a former U.S. Treasury and International Monetary Fund official.

“It’s endorsing what’s already being done in various countries but it isn’t offering a multilateral, global vision.” said Sobel, now affiliated with the Center for Strategic and International Studies in Washington.

The G20 leaders also asked the International Monetary Fund and the World Bank Group “to support countries in need using all instruments to the fullest extent.”

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.

On the health response, the G20 leaders committed to close the financing gap in the WHO’s response plan and strengthen its mandate as well as expand manufacturing capacity of medical supplies, strengthen capacities to respond to infectious diseases, and share clinical data.

WHO Director-General Tedros Adhanom Ghebreyesus addressed the G20 to seek support for ramping up funding and production of personal protection equipment for health workers amid a global shortage.

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

RIYADH (Reuters) – Leaders of the Group of 20 major economies pledged on Thursday to inject $5 trillion in fiscal spending into the global economy to blunt the economic impact of the coronavirus and “do whatever it takes to overcome the pandemic.”

Showing more unity than at any time since the 2008-2009 financial crisis that led to the G20’s creation, the leaders said they committed during a videoconference summit to implement and fund all necessary health measures needed to stop the virus’ spread.

In a statement containing the most conciliatory language on trade in years, the G20 leaders pledged to ensure the flow of vital medical supplies and other goods across borders and to resolve supply chain disruptions.

As many countries enact export bans on medical supplies, the G20 leaders said they would coordinate responses 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.

“We are strongly committed to presenting a united front against this common threat,” the G20 leaders said in a joint statement following their 90-minute call.

Saudi Arabia, the current G20 chair, called the video summit amid earlier criticism of the group’s slow response to the disease. It has infected more than 470,000 people worldwide, killed more than 21,000, and is expected to trigger a global recession.

Saudi King Salman, in opening remarks, said the G20 should resume the normal flow of goods and services, including vital medical supplies, as soon as possible to help restore confidence in the global economy.

The group committed to national spending measures totaling $5 trillion — an amount equal to that pledged in 2009 — along with other large-scale liquidity, credit guarantee schemes and other economic measures.

World Health Organization Director-General Tedros Adhanom Ghebreyesus was to address the G20 to seek support for ramping up funding and production of personal protection equipment for health workers amid a global shortage.

“We have a global responsibility as humanity and especially those countries like the G20,” Tedros told a news conference in Geneva on Wednesday. “They should be able to support countries all over the world.”

In his remarks to the group, U.S. President Donald Trump shared details of the $6 trillion in support the United States is making available through legislation and increased Federal Reserve liquidity, including $2 trillion in fiscal spending, and spoke in support of multilateral action and coordination.

“He talked about working together and sounded more supportive of multilateral coordination than ever before,” said one source who observed the meeting.

The meeting was not marred by acrimony, as was feared given the ongoing oil price war between Saudi Arabia and Russia, and a war of words between the United States and China over the origins and handling of the pandemic, said the source, who was not authorized to speak publicly.

Tedros told G20 leaders that the pandemic is “accelerating at an exponential rate” and urged them to ramp up production of protective gear for health workers and remove export bans.

“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.

Several participants called upon the G20 to play the same role that it played in overcoming the 2008-2009 global financial crisis, when member countries pledged to inject massive fiscal stimulus and financial liquidity into the economy, the Brazilian official said.

IMF RESOURCES

The G20 leaders also asked the International Monetary Fund and the World Bank Group “to support countries in need using all instruments to the fullest extent.”

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.

HEALTH FUNDING

On the health response, the G20 leaders committed to close the financing gap in the WHO’s response plan and strengthen its mandate as well as expand manufacturing capacity of medical supplies, strengthen capacities to respond to infectious diseases, and share clinical data.

Despite calls for cooperation, the G20 risks entanglement in an oil price war between Saudi Arabia and Russia and frictions between the United States and China over the origin of the coronavirus outbreak.

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G20 leaders to convene remotely as coronavirus cases near half a million

RIYADH (Reuters) – Leaders from the Group of 20 major economies will speak by video link on Thursday about combating the coronavirus pandemic and its economic impacts, as global infections top 471,000 with more than 21,000 dead.

G20 finance ministers and central bankers agreed this week to develop an “action plan” to respond to the outbreak, which the International Monetary Fund expects will trigger a global recession, but they offered few details.

World Health Organization director-general Tedros Adhanom Ghebreyesus will address the leaders to seek support for ramping up funding and production of personal protection equipment for health workers amid a worldwide shortage.

“We have a global responsibility as humanity and especially those countries like the G20…” Tedros told a news conference in Geneva late on Wednesday. “They should be able to support countries all over the world…”

King Salman of Saudi Arabia, which as this year’s G20 chair called for the extraordinary virtual summit, tweeted overnight that its goal was “to unite efforts towards a global response.”

There are growing concerns about protectionist measures being discussed or adopted as countries scramble to respond to the virus. The U.S. Chamber of Commerce urged G20 leaders to match a pledge by countries like Australia and Canada to keep supply chains open and avoid export controls.

The video-conference scheduled for 1200 GMT also risks complications from an oil price war between two members, Saudi Arabia and Russia, and rising tensions between two others, the United States and China, over the origin of the virus.

In preparatory talks, China and the United States agreed to call a timeout on their coronavirus blame game, the South China Morning Post reported citing diplomatic sources.

But talks among U.N. Security Council nations have stalled over U.S. insistence that any joint statement call attention to the coronavirus’ origins in China, NBC News reported. Outbreaks, which began in central China late last year, have been reported in 196 countries.

“The U.S.-China dynamic is pivotal to successful G20 coordination, never more so than now as countries grapple 24/7 to confront and contain a pandemic we do not yet fully understand,” former acting U.S. Trade Representative Miriam Sapiro said.

Meanwhile, Washington may use the summit to launch a debate about ending an oil price war between Riyadh and Moscow that has pushed crude prices to near 20-year lows as the pandemic destroyed global demand, The Wall Street Journal reported.

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Saudi King says G20 exceptional summit to unite coronavirus efforts

CAIRO (Reuters) – Saudi Arabia’s King Salman said on Wednesday that as the world confronts the new coronavirus, the Group of 20 major economies will convene in an exceptional summit to come up with initiatives to unite the efforts to combat the pandemic.

“As the world confronts the COVID-19 pandemic and the challenges to healthcare systems and the global economy, we convene this extraordinary G20 summit to unite efforts towards a global response,” the king said on Twitter.

The kingdom, which holds the G20 presidency this year, will host G20 leaders by video-conference on Thursday amid criticism that the group has been slow to respond to the global crisis.

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