What is the Finance Track?
In the Group of 7 (G7), the heads of state and government of seven leading economies coordinate joint positions on global policy issues. Alongside the main meetings, the Finance Track brings together the G7 finance ministers and central bank governors to discuss international economic and fiscal policy as well as current challenges and long-term issues. Given the growing interdependence of the global economy, these issues need to be addressed jointly and in close cooperation.
Several meetings of G7 finance ministers and central bank governors are planned during Germany’s presidency. These meetings are prepared by their representatives (G7 finance deputies) and other high-level finance ministry officials (G7 finance deputies’ deputies).
What are the priorities of the 2022 Finance Track?
The German G7 presidency’s priorities in the Finance Track are to set the course for a sustainable economic recovery from the coronavirus crisis, to ensure economic stability and resilience against future crises, and to shape transformation processes in the areas of digitalisation and climate neutrality. Germany’s G7 presidency will build on the achievements of previous presidencies.
“As chair of the G7 Finance Track, I will be discussing the major global challenges with my counterparts and central bank representatives. We must emerge from the crisis with sustainable public finances around the world, and we must address the challenges of climate change and digitalisation.” Finance Minister Christian Lindner
The economic impact of the coronavirus pandemic, inflation, rising debt levels and soaring energy prices are just some of the challenges currently facing the global economy. To ensure a long-lasting global recovery from the crisis, the Finance Track under Germany’s G7 presidency will highlight the importance of sustainable public finances and a resilient financial system.
Transformation processes in the areas of digitalisation and climate neutrality are also high on the agenda. Germany’s G7 presidency wants to actively shape these transformation processes and use the opportunities they present to generate new growth and lasting prosperity while ensuring that no one is left behind.
The 2022 Finance Track will pay particular attention to low-income countries with high levels of debt. The G7 advocates multilateral support for these countries particularly through a more rigorous implementation of the international debt strategy.
Overcoming the pandemic in the long term is crucial for the economic recovery. Under Germany’s G7 presidency, the Finance Track is committed to accelerating the global vaccination campaign, continuing to fund vaccines, and distributing vaccines effectively and fairly.
At the same time, the German G7 presidency intends to build on the lessons learned during the pandemic and to drive forward a coordinated approach to global pandemic preparedness and strengthening the global health architecture.
Digitalisation is changing the way we do business, work and communicate. Germany’s G7 presidency will focus on the opportunities of digitalisation and, in the context of the Finance Track, promote close cooperation between the G7 countries on the following issues:
- Implementing a global minimum tax for the digital economy
- Innovative and cross-border payment options, especially the opportunities and risks of central bank digital currencies
- Cyber risks in the financial sector
- Digitalising efforts to combat money laundering and terrorism financing
Coordinated and ambitious climate action is the central priority of Germany’s G7 presidency. All G7 countries have committed to becoming climate neutral by 2050 at the latest (or, as in Germany’s case, already by 2045). The 2022 Finance Track will focus on carbon pricing as a central fiscal policy instrument for achieving climate neutrality. The goal is to coordinate carbon pricing policies and to make them easier to compare.
A multilateral solution for climate action would be to create an open and cooperative “climate club” geared towards international cooperation on carbon pricing. This could also serve as a preventative instrument to avoid possible trade disputes. The aim is to drive this forward during Germany’s G7 presidency.
Other climate policy issues in the 2022 Finance Track include international climate finance, sustainable financing to conserve biodiversity, and strengthening sustainable finance in the international financial system.
Detailed information on these key issues can be found in the policy paper.