By Marcela Ayres and Christian Kraemer
SAO PAULO (Reuters) -Finance chiefs of the G20 major countries have failed to agree on a joint statement amid deep divisions over the wars in Gaza and Ukraine, prompting host Brazil to prepare its own document to sum up talks that conclude Thursday, sources told Reuters.
Officials were debating how to describe the wars in a joint communique, with Russia and major Western nations at loggerheads over the language, according to people familiar with the matter. That disagreement was the main issue that blocked consensus, two of the sources said.
The debate highlights deep divides among the group’s members over escalating geopolitical tensions that chair Brazil has struggled to work around. The tensions have threatened to overshadow the meeting’s agenda, including the idea of a global minimum tax on the ultra-rich floated by the host Brazil.
German Finance Minister Christian Lindner had said earlier on Thursday there was still hope the G20 finance ministers would agree on a communique with a reference to geopolitical risks to economic growth.
But the G20 finance ministers and central bank governors could not agree on parts of the statement, the sources said.
The G7 group of rich Western nations and Japan backed the idea of referring to the war “on” Ukraine, while Russia wanted to describe it as the war “in” Ukraine, said two sources, one of whom was with the Brazilian delegation.
The G7 countries also backed language describing the war in Gaza as a “humanitarian crisis” with no mention of Israel, the sources said.
Japan told its G20 counterparts on Wednesday that it condemns act of terrorism by Hamas and has deep concerns over the humanitarian crisis in Gaza, vice finance minister for international affairs Masato Kanda told reporters.
Brazilian officials hosting the event have tried to focus talks on economic cooperation to tackle issues such as climate change and poverty, but countries including Germany pushed for a joint statement mentioning wars in Ukraine and Gaza.
Lindner insisted there could be no business as usual amid a war against Ukraine, Hamas “terror” and a humanitarian situation in Gaza.
“All of this cannot leave us cold, all of this must be discussed here,” he told reporters, adding there was reason to be confident there could be a communique. “A draft has been prepared that reflects the request that the geopolitical issues are discussed,” he said.
INEQUALITY AGENDA ENDORSED
While such tensions hung over the meeting in Sao Paulo, Achim Steiner, head of the United Nations Development Program (UNDP), saw the start of Brazil’s presidency this year as a success, as the only contention of the second day of finance track talks was “over a few words” in a joint statement.
“Brazil had set clear priorities, for example, with their tax proposal,” Steiner told Reuters on Thursday.
As part of efforts to address inequality, Brazil has proposed debates on a global minimum wealth tax that would ensure increased tax contributions by super-rich individuals.
“Even with slightly higher tax rates for the approximately 2,500 billionaires worldwide, very considerable additional revenue could be generated,” he said.
Brazil will aim to craft a statement on international taxation by the group’s July summit, Finance Minister Fernando Haddad said on Thursday. He said he was expecting a report on the matter from the European Tax Observatory, which has advocated for a global wealth tax on the world’s richest people, in contrast with income taxes common in most major economies.
French Finance Minister Bruno Le Maire expressed support on Wednesday for a global minimum tax on the world’s most wealthy.
Japan’s representative Kanda, who is participating in the G20 talks on behalf of the country’s finance minister, said the group has broadly endorsed Brazil’s proposal to highlight steps to address inequality, as this year’s mainstream agenda.
(Reporting by Marcela Ayres and Christian Kraemer; additional reporting and writing by Leika Kihara; editing by Brad Haynes, Gabriel Araujo, Paul Simao, Alistair Bell and Deepa Babington)
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