New Covid outbreaks pose a serious danger to financial restoration, says OECD chief
Covid-19 vaccinations without prior registration will be given at Sector 30 District Hospital in Noida, India on June 22, 2021.
Sunil Ghosh | Hindustan times | Getty Images
New outbreaks of Covid-19 remain one of the greatest risks to a global economic recovery, warned the Secretary-General of the OECD, calling on developed countries to support less developed countries with their vaccination programs.
“We have to do what we can to get as many people as possible around the world to vaccinate. There is a special responsibility for developed economies and it is not just about charity or charity, it is actually both a matter of self-interest “to keep our people safe … and to ensure that economic recovery is sustainable” said Mathias Cormann, Secretary General of the OECD, on Thursday.
“New outbreaks are still one of the biggest downside risks to the ongoing economic recovery,” he told CNBC’s Annette Weisbach.
“There is a race between vaccinating as many people as possible around the world, including and especially in developing countries, and the risk of new variants emerging and variants that may be resistant to the vaccines currently available,” he noted.
Read more: Covid-19 has destroyed 22 million jobs in advanced countries, according to the OECD
It is not only Cormann who fears that the continued spread of Covid-19, especially the latest highly transmissible Delta variant in younger and unvaccinated people, could destroy an economic recovery.
French Finance Minister Bruno Le Maire told CNBC on Tuesday that “the only thing that could jeopardize France’s economic recovery is a new wave of the pandemic”.
On Wednesday, the World Health Organization reiterated its call for wealthy nations to help poorer countries by sharing Covid vaccines, especially for health and care workers and the elderly.
Global minimum tax rate
The coronavirus pandemic may be the most pressing problem for global public health, but governments have now turned to other pressing matters, including international tax reform.
In June, treasury ministers from the most advanced economies known as the Group of Seven backed a US proposal requiring companies around the world to pay at least 15% income tax.
Last Thursday, US Treasury Secretary Janet Yellen announced that at least 130 nations had agreed to a global minimum tax on companies, part of a broader agreement to revise international tax rules.
Cormann said the deal was urgently needed, noting that “131 countries have reached an agreement on an internationally consistent path to fair taxation. Globalization and the digitization of our economies led to efficiency distortions and serious inequalities in our tax system and companies did not pay their fair share of taxes where they should. “
“We now have an agreement whereby the winners of globalization, including and especially the major digital multinationals, would pay their fair share of taxes or pay their fair share of taxes once (the deal) was in the markets in which they operate are implemented. “Their profits.”
He noted that all 131 countries have agreed that the global minimum corporate tax rate should be 15%, as have those in the group of 20 developed countries. “This underpins tax competition worldwide.”
Some low corporate tax countries like Ireland and Hungary have concerns about the deal, but Cormann said they were involved in the negotiation process: “Some countries seem to be starting from a different position,” he noted, “but 131 out of 139”. Counties (members of the G20 / OECD Inclusive Framework working together on tax reform) are on board and this is an important milestone. “