MNI POLICY: G7 Leaders Vow To Do "Whatever Is Necessary"

By Evan Ryser

     WASHINGTON (MNI) - Group of Seven leaders said Monday they will do whatever

is necessary to stabilize the global economy in response to COVID-19, after

earlier promises of coordinated action were followed by national shutdowns and

crashing financial markets.  

     "We are committed to doing whatever is necessary to ensure a strong global

response through closer cooperation and enhanced coordination of our efforts.

While current challenges may require national emergency measures, we remain

committed to the stability of the global economy," the G7 leaders said in a

statement released by the White House.

     The leaders agreed to strengthen health systems, use all fiscal and

monetary measures to address the economic impact of the outbreak and restore

growth, and support the efforts of international organizations to suppress this

disease outbreak and swiftly provide appropriate financial assistance to address

the economic shock. It's an echo of a commitment made during the global

financial crisis.

     "We are determined not only to restore the level of growth anticipated

before the COVID-19 pandemic but also to build the foundation for stronger

future growth," the statement said. 

     Larry Kudlow, White House national economic council director, told

reporters before the release of the statement that G7 leaders would continue to

meet and coordinate. "They all want to do whatever it takes on the health side

of solving the virus side and on the economic side, we just heard that from one

president and prime minister after another."

     Markets plunged again after the call and unprecedented action by central

banks over the last 24 hours. The Fed cut rates to zero Sunday before Asian

markets opened and central banks around the world offered new credit injections

amid signs that even the Treasury market was showing signs of illiquidity. 

     G7 leaders said they are "mobilizing the full range of instruments,

including monetary and fiscal measures, as well as targeted actions, to support

immediately and as much as necessary the workers, companies, and sectors most

affected" with a particular emphasis on small and medium businesses. Still, the

U.S. has yet to step up with a package worth at least 1% of GDP that policy

makers say is needed to replace lost wages and business revenue. 

     G7 leaders called on the IMF and the World Bank Group and other

International Organizations to further support countries and to implement

swiftly the international financial assistance that is appropriate to help

countries that face the health and economic shock of COVID-19.

     "We resolve to coordinate measures and do whatever it takes, using all

policy tools, to achieve strong growth in the G7 economies, and to safeguard

against downside risks," the G7 leaders said.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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