Ministero dell'Economia e delle Finanze

01/21/2021

Speech by Minister of the Economy and Finance Roberto Gualtieri at the “B20 Inception Meeting”.

B20 Meeting
(21 January 2021)

The 2021 Italian Presidency of the G20

Dear friends, thanks for inviting me to open this session of the Business 20. This is an important opportunity to present the main priorities of the Italian Presidency to some of our most distinguished stakeholders.

Italy is taking up the G20 in an extremely challenging environment. We expect 2021 to be the year of mass vaccination and victory against the pandemic. The world economy has shown remarkable resilience in recent months even as many countries were savaged by a second wave of the pandemic.

World trade and manufacturing production have resumed expanding. This is thanks not only to a more selective approach to lockdowns and social distancing rules, but also to vigorous fiscal and monetary policy actions. However, the battle is far from over and the global recovery is still weak and uneven. Most importantly, the legacy of the crisis will weigh on our societies for years to come.

Against this backdrop, policies need to remain supportive until the recovery is firmly established. We believe that reversing fiscal accommodation at this stage of the pandemic would be a costly mistake. However, the focus should gradually shift from current expenditure and tax breaks, to investment, both public and private in order to regain output losses and promote growth.

In this vein, the Italian Presidency will encourage global policy makers to continue their efforts to overcome the pandemic and foster a sustainable, balanced and inclusive recovery.

At the same time, we are firmly convinced that the current juncture provides an opportunity to develop new paradigms to move towards a transformative growth and deliver a broad-based prosperity. As you probably already know, we have summarised this vision under three pillars: People, Planet and Prosperity.

To succeed, global economies should join forces. This is why our Presidency aims at revamping multilateralism as a key principle of international cooperation.

We are extremely confident the change in the US administration is opening new opportunities to relaunch transatlantic and international cooperation. America is back. While remaining realistic and aware that the G20 is a consensus-based group, we can hopefully make progress on a number of sensitive yet crucial topics, such as global health, climate action and sustainable growth.

I believe the G20 Finance Track can give an important boost to international cooperation on these topics. Let me then go through our main ideas, which can be summarised under six main priorities:

First, in our interconnected planet, public health should be considered a global common good. Global health is a matter of relevance for all countries, no matter for their momentary success in the fight to the virus. We should continue our efforts until the pandemic is eradicated all over the world. Only then, we will be able to return to normal lives, global growth and stability. For this reason, the Italian Presidency will promote adequate investment and universal access to health and vaccines. We will continue to cooperate closely with Health Ministers, with a view to strengthening the resilience, inclusiveness and response capacity of health systems.

Going beyond the fight to this pandemic, we shall make sure that future generations are better prepared again similar shocks.

Massive efforts are underway to develop and distribute vaccines and treatments and to strengthen surveillance networks and global protocols for health emergencies. However, resources remain limited, resulting in unacceptable human and economic costs.

Looking forward, we intend to promote a review of the financing system for global commons and on how to better leverage resources from public, private, philanthropic and International Financial Institutions towards pandemic prevention, surveillance, preparedness and response.

Our proposal is that the G20 mandate a High Level Independent Panel to recommend actionable solutions, building on WHO assessment of gaps in pandemic preparedness and ongoing international initiatives. The Panel would present its recommendations to Ministers and Governors in July for their consideration and follow up decisions in conjunction with Health Ministers in October.

Our second priority is to promote an international environment conducive to investment and growth. The Presidency will foster coordination building on the Action Plan and on a monitoring system which should factor in the risks stemming from different sources of instability, including climate and health conditions. Looking forward, we will put a strong focus on how investment in digitalisation can contribute to productivity gains, while making sure that nobody is left behind along the transition.

Investment in quality infrastructures also plays a critical role to spur economic recovery and set the ground for a sustainable and inclusive growth. Investment in infrastructure should not be limited to new large-scale projects. Good practices at the local level should be encouraged. Similarly, maintaining and optimising existing assets should be given high priority.

Our third priority is to make sure the global financial system is effective in financing the real economy.

The financial sector also plays a key role in accompanying the green transformation. We will foster initiatives to improve the resilience of the financial system against climate-related stability risks, including by ensuring better quality data and more comparable disclosure. I know you will discuss this important issue with Michael Bloomberg, later today.

The Covid-19 also contributed to shed light on the opportunities and challenges linked to the spread of digitalised financial services. Under our Presidency, we will try to address the gaps related to digital and financial “awareness” of vulnerable groups and firms.

Our fourth priority is to support vulnerable economies and strengthen the international financial architecture.

In 2020, the immediate liquidity needs of the most vulnerable countries were addressed. Our Presidency will follow up on the existing initiatives, while favouring a gradual shift to addressing longer-term financing needs and pursuing the Sustainable Development Goals.

Fifth, a fairer and more sustainable international taxation system is key to promote global trust. Expectations are high on G20 members and the Italian Presidency is committed to meet these expectations. We will strive to reach a comprehensive agreement on the taxation of digital economy and on the definition of a global minimum effective taxation, based on the work carried out by the OECD. Moreover, we cannot ignore the potential of taxation in supporting the green transition. Italy will foster a debate on the role of taxation in protecting the environment and promoting a more efficient use of energy.

Finally, we must meet the challenge of improving living conditions for all while protecting our planet. Let me spend a few more words on this key priority.

• The current juncture represents a unique opportunity to shape the recovery and orient it towards a more sustainable and inclusive model.

As G20 Presidency, we feel responsible to promote a multilateral approach to define strategies capable of creating quality jobs, while promoting a fair transition towards modern, resource-efficient and competitive economies, in line with the objectives of the Paris agreement and the path set by Europe with its new Green Deal.

An ambitious Green Agenda will be a cross-cutting priority across all the G20 activities, ranging from the inclusion of environmental risks in macroeconomic analyses, to the impact of green investment on productivity, to the potential of nature-based solutions applied to infrastructures.

Our Presidency has also decided to re-establish the Sustainable Finance Study Group, whose activities were discontinued over the last two years.

The Group will explore ways to enhance the role of the financial system in promoting a just transition towards a low-carbon and greener economy, creating new opportunities and mobilizing resources towards a sustainable recovery.

In particular, the Group will propose solutions to improve quality, availability and comparability of data to assess financial risks and opportunities stemming from climate change.

We really hope the establishment of this Group, and more generally our ambitious green agenda, can contribute to fuel a global debate on a number of sensitive yet crucial topics, such as sustainable finance, energy poverty, environmental taxation or carbon pricing.

We also intend to provide a political forum for such a debate. On 11 July, at the margins of the ministerial meeting in Venice, the Presidency will host a high-level event with Ministers, Governors and eminent representatives of the private sector and international organisations, to publicly reflect on how to foster a green and inclusive transformation at a global level.

Therefore, I take the chance to invite you to our discussion in Venice. I attach great value to the contribution of business to a sustainable recovery. Mobilising private resources towards green investment is key to succeed in the green transition.

Dear friends, thanks for your attention. As I said at the beginning, a renewed multilateralism is a precondition to make progress on our ambitious agenda. On a similar vein, we devote the outmost importance to fully involving the business community and the civil society at large. We will do so all over our Presidency. We count on your support and on all the engagement, competence and energy that you can mobilise.

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