Joe Biden gained support at the G7 summit for a “spending spike” plan, which Western leaders rejected austerity in a post-Covid world and pledged to address inequality at home and abroad. abroad.
Biden’s call for continued economic stimulus was supported by his fellow leaders the summit in Cornwall in the south-west of England, at a meeting framed by leaders as the moment the West began a struggle against an ascending China.
The US president opened the first session of the summit in Carbis Bay and – according to a witness – was supported by all G7 leaders while calling on the West to “meet the moment and support the economy” .
Mario Draghi, Italy’s prime minister and former head of the European Central Bank, followed Biden and said: “There is a convincing case for expansionary fiscal policy.”
Draghi argued that it was fair to spend now, even if Western countries had to engage in long-term fiscal prudence to reassure markets and to ensure that central bankers do not panic and raise interest rates excessively.
In a statement summarizing the West’s apparent conversion to social democracy, summit leader Boris Johnson said it was vital that the pandemic did not cause a “lasting scar” of inequality.
Opening the top, he said: “It is vital that we do not repeat the mistakes of the last great crisis, the last great economic recession of 2008 when the recovery was not uniform in all parts of society.”
The British Conservative Prime Minister has already described as a “mistake” the austerity policies adopted by the government of David Cameron, his predecessor.
Johnson also said the show should be built with the environment in mind and in “a more gender-neutral and feminine way.”
Although the G7’s commitments are not binding, the West’s appetite for fiscal expansion sets the stage for some awkward discussions this fall between Johnson and his conservative tax chancellor Rishi Sunak.
G7 countries will use the summit to commit to higher spending to help the developing world, with a clear message that the West offers an alternative to the support offered by Beijing.
The leaders agreed to provide 1 billion doses of vaccines to the poorest countries, which comes in response to China’s “vaccine diplomacy”. The United States has said that Beijing is offering its medical help with “ropes attached.”
The G7 will hold weekend meetings to discuss a plan to help poor countries cope with climate change, a capital investment program drafted by some British officials as a counterweight to Belt and Road of China global infrastructure program.
Meanwhile the verdict will support plans for a new system to tax the largest multinational companies, although there is still a dispute as to exactly which companies should be subject to its purpose.
Biden does not want excessive weight for American technology companies, while Britain is struggle to foreclose and big banks. “The United States does not see a conceptual basis for the exclusion of financial services,” said a U.S. Treasury official.
After four years of Donald Trump’s presidency, when the G7 became a sad forum for division and resentment, mood on the Cornish coast was decidedly optimistic at the start of the three-day summit.
Emmanuel Macron, the French president, threw his arm around Biden – on his first trip abroad as president of the United States – on the beach at Carbis Bay and discussed the need for democracies to work for “and middle classes.”
Meanwhile Canadian Justin Trudeau – who had previously argued that austerity programs had contributed to the rise of populism – was among those taking a plunge into the sea.
On Friday evening the G7 leaders and partners traveled to the Eden Project, a futuristic environmental park, to meet Queen Elizabeth and other members of the royal family. A barbecue on the beach is planned for Saturday.
The summit continues Saturday with further discussion on the economy, foreign policy and health; it concludes on Sunday at noon after a discussion on the fight against climate change.