World leaders back Biden’s G7 call for more economic stimulus

Joe Biden garnered support at the G7 summit for a “keep spending” plan, as Western leaders rejected austerity in a post-Covid world and pledged to tackle inequality at home and abroad.

Biden’s call for continued economic stimulus was backed by his fellow leaders in The summit in Cornwall In southwest England, at a gathering that leaders coined as the moment the West would begin a fight against a rising China.

The US president opened the first session of the summit in Carbis Bay and – according to one witness – received support from all G7 leaders as he called on the West to “face the moment and support the economy”.

Mario Draghi, the Italian prime minister and former head of the European Central Bank, followed Biden and declared: “There is a compelling case for expansionary fiscal policy.”

Draghi argued that it was right to spend now, even if Western countries were forced to commit to long-term fiscal wisdom to reassure markets and to ensure that central bankers did not panic and raise interest rates excessively.

In an announcement that summed up the West’s apparent shift to social democracy, summit host Boris Johnson said it was critical that the pandemic did not cause a “permanent scar” of inequality.

opening summit, He said: “It is imperative 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 former conservative British prime minister described the austerity policies of his predecessor David Cameron’s government as a “mistake”.

Johnson also said the recovery should take place with the environment in mind and in a way that is “more gender-neutral and more feminine”.

Although the G7 commitments are not binding, the West’s appetite for fiscal expansion set the stage for some awkward discussions this fall between Johnson and his fiscally conservative adviser Rishi Sunak.

G7 nations will use the summit to commit to increasing spending to help the developing world, with a clear message that the West offers an alternative to Beijing’s support.

leaders Agreed to supply 1 billion doses of vaccine to poor countries, which comes in response to Chinese “vaccine diplomacy”. The United States claimed that Beijing was providing its medical assistance “on conditions”.

The G7 will use weekend meetings to discuss a plan to help poor countries tackle climate change, a capital investment program designed by some British officials to act as a counterweight China’s Belt and Road Global Infrastructure Program.

In the meantime, the summit will endorse plans for A new system for taxing the largest multinational corporations, although disagreement continues over which companies should fall within its scope.

US President Joe Biden and French President Emmanuel Macron walk together by the sea at the G7 summit © Phil Noble/Reuters

Biden does not want an excessive burden on US tech companies, while Britain does Fighting to exclude major banks. “The United States does not see a conceptual basis for excluding financial services,” a US Treasury official said.

Four years into Donald Trump’s presidency, when the G7 has become a bleak forum for division and animosity, the mood on the Corniche coast was certainly upbeat at the start of the three-day summit.

Emmanuel Macron, the French president, threw his arm around Biden – on his first foreign trip as US president – on the shore of Carbis Bay and discussed the need for democracies to work for the “middle classes”.

Meanwhile, Canada’s Justin Trudeau – who earlier warned that austerity programs had contributed to the rise of populism – was among those who took a dip.

On Friday evening, G7 leaders and partners traveled to the Eden Project, a futuristic ecological park, to meet Queen Elizabeth and other members of the royal family. A barbecue is planned on the beach on Saturday.

The summit continues on Saturday with more discussion on the economy, foreign policy and health. It concludes at lunchtime on Sunday after a discussion on tackling climate change.

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