On 15 April, G20 finance ministers and central bank governors held a virtual meeting to discuss the details of a coordinated fiscal, monetary and regulatory response to the Covid-19 pandemic.
G20 Finance Ministers agreed decisive action was needed to reduce the global economic damage of the pandemic. They set out an Action Plan that includes a call for the swift implementation of a $200 billion package of global support from the World Bank Group and Regional Development Banks. This money will be invested in (i) health programmes, (ii) support to the poorest through safety nets and cash transfer programmes, (iii) emergency fiscal support to affected countries, (iv) support to the private sector through trade finance, liquidity and working capital programmes.
The Action Plan also includes:
- Delivering a comprehensive IMF support package – Finance Ministers support the full use of existing instruments and lending capacities, including precautionary instruments like the Flexible Credit Line (“FCL“) and the Precautionary and Liquidity Line (“PLL“), as well as the IMF’s readiness to mobilize its $1 trillion lending capacity to meet members’ needs. They also support the adoption of a Short-Term Liquidity line to help countries with strong fundamentals and policies through predictable and renewable access to IMF resources.
- Providing debt service suspension for the poorest countries – Finance Ministers support a time-bound suspension of debt service payments for the poorest countries that request forbearance, and have agreed on a coordinated approach with a common term sheet providing the key features for this initiative.
- Enhancing coordination among international organisations to maximise their impact and optimise the use of resources – Finance Ministers support enhanced policy and operational coordination across all relevant international organisations to ensure resources get to where they are most needed.
- Sharing best practice on containment measures – Finance Ministers are committed to sharing country data, analysis and experiences on the implementation and impact of Covid-19 containment measures to support policy making.
The UK government published an update following the meeting, saying the Chancellor also called on more G20 Finance Ministers to fund the development of vaccines, with the UK already contributing £250 million for the Coalition for Epidemic Preparedness Innovations – a global organisation that conducts research to develop vaccines against infectious diseases.
The Action Plan will be reviewed regularly as the impact of the pandemic unfolds. Finance Ministers will track the implementation and report on this plan at the G20 Finance Ministers and Central Bank Governors Meeting in July 2020 and for the G20 Leaders’ Summit in November 2020.