Europe admits G20 economies will miss extra growth target

G20 economies agreed in 2014 to boost growth in their economies by at least an additional 2% over five years through reforms.

Participants in the G20 Finance Ministers and Central Bank Governors Meeting pose for the Family photo in Baden-Baden, southern Germany, on March 17, 2017. Finance ministers from the world's top nations gather in Germany on March 17, as fears grow of a looming trade war over US President Donald Trump's America First policy. Picture: AFP

VALLETTA - European Union finance ministers admitted on Saturday that the world's 20 biggest economies (G20) will miss their target of generating additional economic growth through reforms by 2018 and called for reflection on why they have failed.

G20 economies agreed in 2014 to boost growth in their economies by at least an additional 2% over five years through reforms, adding more than $2 trillion to the global economy and creating millions of jobs.

"It seems likely that we will not reach our 2-in-5 growth ambition by 2018," said a terms of reference document approved by EU finance ministers for the next G20 financial leaders meeting on 20-21 April in Washington.

"We should reflect on the appropriate communication around our 2-in-5 objective and build a shared assessment and understanding of why we have not fully delivered," said the document, obtained by Reuters.

"It is thus vital to accelerate the implementation of structural reforms and of investment in productive infrastructure," it said.

EU delegations to G20 meeting in Washington will also reiterate that the G20 "should avoid all forms of protectionism, support the Paris agreement on climate change, the work on green finance, and the multilateral approach to taxation and to financial regulation," the document showed.

The declaration, while standard in previous G20 meetings and communiques, has become problematic since Donald Trump became the president of the United States last year.

At a meeting in March in the German town of Baden Baden, G20 finance ministers dropped a pledge to keep global trade free and open, yielding to an increasingly protectionist United States.

Breaking a decade-long tradition of endorsing open trade, the G20 made only a token reference to trade in their communique in a clear defeat for host nation Germany, which fought the new US government's attempts to water down past commitments.

G20 finance chiefs also removed from their statement a pledge to finance the fight against climate change, an anticipated outcome after Trump called global warming a "hoax".