G-20 Should Address Income Gap, Fragility of Financial Systems

G-20 ministers in Shanghai appeared to be aware of the importance of structural work. In particular, there was agreement in our panel discussions that the Base Erosion and Profit Shifting (BEPS) project of the OECD was an essential element to deal with tax avoidance and ensure that profits are taxed where economic activity generating it takes place.

From the country perspective, several nations documented the structural reforms issues on which they are working. However, as always, progress is sometimes more limited than meets the eye. The European experience of the recent years has certainly been that despite a lot of rhetorical emphasis on addressing structural issues, many countries in the core of the EU have barely engaged in serious reforms. Nations under financial assistance and market pressure, in turn, typically reformed, but with various degrees of appetite.