Balance the key for G20 nations
Source: Agencies |
June 28, 2010, Monday
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Print Edition
Print Edition
World leaders put the finishing touches on plans to build a more stable global economy yesterday, but backed away from one-size-fits-all pledges as two years of crisis give way to an uneven recovery.
Balance was the buzz word. The Group of 20 rich and emerging economies wants to halve budget deficits by 2013 without stunting growth, and clamp down on risky bank behavior without choking off lending.
"Here's the tightrope that we must walk," Canadian Prime Minister Stephen Harper said at the start of meeting.
"To sustain recovery it is imperative that we follow through on existing stimulus plans... but at the same time advanced countries must send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order," he said.
The leaders must also show progress on a promise made in September to rebalance the global economy. That means export-reliant nations such as China and Germany need to look inward for growth and indebted countries, including the United States, need to change their borrow-and-spend ways.
Chinese President Hu Jintao, US President Barack Obama and leaders from the other G20 economic powers gathered for the fourth time since the financial crisis spilling out of the US in 2007 fueled fears of a new Great Depression. The G20, which includes emerging economic powers as well as the developed economies where the economic trouble started, united last year to throw trillions of dollars into the battle against recession.
The group has since become the predominant forum to coordinate tackling global economic challenges.
With sluggish growth in many developed countries, Washington fears Europe's drive to slash post-recession debt could derail the recovery, a worry also voiced by other G20 leaders, including Indian Prime Minister Manmohan Singh.
Singh said if too many countries pull back at once it "could provoke a double-dip recession."
United Nations Secretary-General Ban Ki-moon said he understood the pressure to put public finances back on a sustainable path, but urged G20 leaders to be mindful of who bore the burden. "We must not balance budgets on the backs of the world's poorest people," Ban said.
The G20 leaders were set to announce a concerted effort to halve public sector deficits within three years and stabilize government debt.
Halving deficits looks easily achievable, considering President Obama has already pledged to do that and Europe sees the target as a bare minimum.
Balance was the buzz word. The Group of 20 rich and emerging economies wants to halve budget deficits by 2013 without stunting growth, and clamp down on risky bank behavior without choking off lending.
"Here's the tightrope that we must walk," Canadian Prime Minister Stephen Harper said at the start of meeting.
"To sustain recovery it is imperative that we follow through on existing stimulus plans... but at the same time advanced countries must send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order," he said.
The leaders must also show progress on a promise made in September to rebalance the global economy. That means export-reliant nations such as China and Germany need to look inward for growth and indebted countries, including the United States, need to change their borrow-and-spend ways.
Chinese President Hu Jintao, US President Barack Obama and leaders from the other G20 economic powers gathered for the fourth time since the financial crisis spilling out of the US in 2007 fueled fears of a new Great Depression. The G20, which includes emerging economic powers as well as the developed economies where the economic trouble started, united last year to throw trillions of dollars into the battle against recession.
The group has since become the predominant forum to coordinate tackling global economic challenges.
With sluggish growth in many developed countries, Washington fears Europe's drive to slash post-recession debt could derail the recovery, a worry also voiced by other G20 leaders, including Indian Prime Minister Manmohan Singh.
Singh said if too many countries pull back at once it "could provoke a double-dip recession."
United Nations Secretary-General Ban Ki-moon said he understood the pressure to put public finances back on a sustainable path, but urged G20 leaders to be mindful of who bore the burden. "We must not balance budgets on the backs of the world's poorest people," Ban said.
The G20 leaders were set to announce a concerted effort to halve public sector deficits within three years and stabilize government debt.
Halving deficits looks easily achievable, considering President Obama has already pledged to do that and Europe sees the target as a bare minimum.
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