US irks G20 ministers by bringing back Russia, barring journalists

Highlights

• Bessent says growth is best way out of debt
• Russian finance minister makes surprise appearance at G20 meeting
• US Treasury denies some journalists' access to G20 coverage
• Washington urging others to review terms of trade with China

The United States' move to welcome Russia back to a meeting of G20 countries yesterday (31 August) while denying some journalists access to the gathering dismayed some finance leaders present, deflecting from its bid ​to focus talks on global economic growth.

The two-day meeting in Asheville, North Carolina, comes as the global economy is being buffeted by an energy shock triggered by the Iran war, faces rising tensions over China's huge goods trade surplus and is braced for how an investment surge in AI will ultimately play out.

As US Treasury Secretary Scott Bessent opened the meeting, some ministers were surprised and dismayed to see Russian Finance Minister Anton Siluanov sitting at the G20 table, the first time they had attended the forum in person since Russia invaded Ukraine in 2022.

Polish Finance Minister Andrzej Domanski told Reuters he was unhappy to see Russia represented, although he recognised the right of G20 hosts to invite guests.

"We do not trust Russia. They lie constantly and you need to be really, really cautious while discussing with them," he told Reuters in an interview, stressing that Russia was the aggressor in its conflict ​with Ukraine.

"So for me it would be very difficult to have any kind of conversation with Russia."

Siluanov also held a bilateral meeting with Bessent that covered financial cooperation within the G20 framework, Russia's finance ministry said. A US official said the ​focus of that meeting was on President Donald Trump's peace plan for Ukraine. A source familiar with the discussions said Bessent told Siluanov no economic relief for Russia or agreements on other issues were possible until ⁠the war ends.

German Finance Minister Lars Klingbeil said Europe was preparing a further package of sanctions against Russia, but Siluanov's presence at the Asheville meeting sent a "quite troubling" signal for US cooperation with the effort.

"I would have wanted greater clarity from the American side that ​he should not be received here as a normal guest," Klingbeil said.

European officials also said they opposed appearing in the traditional "family photo" of G20 finance ministers and central bank governors, adding that this ultimately was taken without Siluanov.

His appearance marks a stark contrast from April 2022, when ​even his virtual participation in a G20 meeting in Washington drew broad condemnation of Russia's invasion of Ukraine and prompted a walkout by officials from the US, Britain, Canada and the European Central Bank.

Focus on growth

Bessent told reporters that stronger growth was the best path out of a debt overhang built up since the 2008 global financial crisis and the COVID-19 pandemic.

Global debt levels earlier this year hit a record of nearly $353 trillion, leading to concerns about financial stability and prompting some investors to reappraise even traditionally safe havens such as US Treasuries.

"The world is awash in debt post-GFC, post-covid, and the only way for us to get ​out of this is to grow our way out of this," US Treasury Secretary Scott Bessent said at the start of the meeting, referring to the 2007 to 2009 global financial crisis.

"I'm confident that a lot of the leaders are very receptive to this," he added.

The ​Treasury also took the unusual step of inviting private-sector luminaries to participate in some of the G20 sessions on promoting stronger growth, reflecting the Trump administration's view that growth was best served by deregulation, producing more energy and fostering innovation.

Bessent told one of the sessions that global growth had underperformed ‌its potential for ⁠too long and that causes can no longer include "policy failures of our own making."

He said the US Treasury had identified several impediments to growth that G20 countries needed to work on, including "excessive regulatory and administrative burdens, poorly designed financial incentives and tax systems, insufficient public and private investment, internal market fragmentation, and gaps in workforce skills and mobility."

Press access denials

Another issue that drew criticism was the US Treasury's decision to deny certain journalists media credentials to cover the event, including teams from Bloomberg News and specific reporters from the New York Times and the Wall Street Journal.

"I believe the press has a completely legitimate interest in reporting openly and freely on this G20 summit," Klingbeil said. "I consider it unacceptable for journalists or entire editorial teams to be excluded."

A US Treasury spokesperson said that over 300 media were covering the event, including another ​New York Times reporter, and access comes with a "responsibility to report ​factual information consistent with established journalistic standards."

US Federal Reserve Chairman ⁠Kevin Warsh, attending his first international economic policy meeting since taking office in May, said he was looking forward to learning more about growth prospects among member economies. He said an era of "secular stagnation" marked by a lack of innovation looked to be over amid an AI investment boom.

"If I were to try to characterize this moment, it would be one of a global investment surge," he said, adding that ​it had reversed the "global savings glut", which in the past had kept capital idle due to a shortage of investment opportunities.

No debt market 'turmoil'

Bessent also highlighted strong US growth, which has benefited from ​investments in AI infrastructure that have also ⁠helped to push up US Treasury debt yields by soaking up savings that had previously held US borrowing costs down by flowing into Treasuries.

Ahead of the G20 talks, Bessent played downmounting market scrutiny of US debt levels, arguing the United States was in a stronger position than many advanced economies because it continues to grow, even while running large budget deficits.

"First of all, I'm not sure where the bond market turmoil is," he told Reuters in an interview on Sunday. "What's important, too, is that we are growing."

Today (1 September), the US will focus on reducing global trade imbalances, and Bessent ⁠said he would urge ​G20 members to re-examine their terms of trade with China to pressure Beijing to rebalance its economy away from exports and toward domestic consumption.

"The world cannot have ​a China with a $1.2 trillion trade surplus," Bessent said in the Reuters interview. "In China, the economy is quite weak, and they are trying to export their way out of it, and they need to rebalance their economy."

Economists say the US must also reduce its growing fiscal deficits as part of this rebalancing effort.

"We need a more balanced ​world," French Finance Minister Roland Lescure said. "We know that every big zone, whether China, the US and Europe, has got their own homework to do."