The Day at a Glance | June 11 2021

The Top

*G-7 summit kicks off in Cornwall, England; vaccine efforts and corporate taxes at a global level will be discussed.

*Senators present a bipartisan proposal on infrastructure spending to Joe Biden: 1.2 trillion dollars in 8 years.

*The Bundesbank revised its growth estimates upwards for the German economy in 2021 (3.7% vs 3% prev.) and 2022 (5.2% vs 4.5% prev.).

*Industrial production in Mexico receded (-) 0.2% in April with setbacks in all industries except mining; at an annual rate, a 35.7% expansion was recorded.

*Russia increases its interest rate for the third time amidst growing inflation; it considers that larger increases will be necessary.

Economic environment

G-7 summit kicks off. G-7 meetings will kick off today (US, United Kingdom, Canada, France, Germany, Italy and Japan). Representatives of the European Union, India, South Korea and Australia will also be part of the conversations as guests. The leaders will hold meetings throughout the weekend (June 11-13) in Cornwall, England, in order to discuss issues related to the pandemic, climate change and trade. Most of the attention will focus on vaccine programs for low income countries in addition to possibly closing an agreement that could implement a minimum corporate tax at a global level. In previous meetings, G-7 Ministers of Finance agreed on fighting tax evasion and on implementing of a minimum 15% corporate tax at a worldwide level. This measure seeks to avoid fiscal competition between countries and guarantee that the rules are clear for businesses with operations in various countries in order for them to pay taxes. In principle, it seeks to have multinational corporations pay higher taxes in countries that sell their products or offer their services, and not where they report their income. This would limit multinational corporations` ability to have a tax haven. The decision will be taken after large governments became highly indebted in order to face the pandemic – and the measure could affect tech companies more, such as Amazon and Facebook. The measure is expected to be discussed and adopted in next month`s G-20 summit, in which emerging economies like China, Russia and Brazil will participate.