G20 nations to take own paths towards deficit reduction
G20 leaders pledge to halve budget deficits by 2013 after two-day Toronto summit
Monday, 28, Jun 2010 02:00
By Matthew Champion.
G20 leaders have wrapped up a two-day summit with a pledge to halve budget deficits by 2013, but national governments will take their own path towards cutting their debt.
The meeting in Toronto concluded with broad-brush agreement on steps to preserve the global economic recovery, despite major principled disagreements between the US, Brazil, China and India, which are all lukewarm towards spending cuts, and EU nations, which have made cutting their deficits their top priority.
"Every economy is unique and every country will chart its own unique course, but make no mistake, we are all moving in the same direction," US president Barack Obama said.
Stephen Harper, Canadian prime minister and host in Toronto, said the "cohesion of the G20 was striking".
"We're following different policies but with a single objective; to ensure growth and recovery in a durable and balanced way."
While the summit's final communiqué puts on a united front, all G20 governments were already committed to deficit reduction.
In a key concession to EU nations, the statement warned that a "failure to implement consolidation where necessary would undermine confidence and hamper growth".
"Reflecting this balance, advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilise or reduce government debt-to-GDP ratios by 2016," it concluded.
Plans for a global bank levy were dismissed, meanwhile, with the final decision resting with individual governments.
Campaigners have given the two-day summit a very cool reception.
Meredith Alexander, head of G20 policy at ActionAid, commented: "The global financial system may be in trouble but it was the G20 summit itself that was bankrupt.
"The leaders lacked ideas and any willingness to compromise. As a result, the only outcome is a communiqué that will be forgotten before the day is over."
More than 500 protestors were arrested outside the meeting in Toronto as police and demonstrators clashed.