Photo: AP
Britain's Prime Minister David Cameron attends the opening plenary session of the G20 nations summit in Toronto, 27 June 2010
Leaders from the world's 20 most important economies set targets to slash government deficits, haggled over tougher financial regulations and compromised on a proposal to tax banks. The G20 meeting wrapped up Sunday in Toronto.
G20 leaders say the global economic recovery is fragile and faces serious challenges, including growing government deficits.
The Greek crisis showed how large deficits can make lenders worry that they will not be repaid, and keep them from making the new loans, stalling the economy.
Canadian Prime Minister Stephen Harper urged his colleagues in advanced nations to cut their deficits in half in three years, but also urged them to make cuts with caution.
"Here is the tight rope that we must walk," he said. "To sustain recovery it is imperative that we follow through on existing stimulus plans those to which we committed ourselves last year 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."
Mr. Harper's point is that cutting deficits too little or too slowly hurts investor confidence. But if nations make the cuts too deeply or too quickly, they risk losing the potential economic stimulus generated by government spending, something that critics say could push the global economy back into recession.
The G20's final communiqu , hammered out by leaders behind closed doors, also offers a compromise on a proposal for a new tax on banks.
G20 leaders say the global economic recovery is fragile and faces serious challenges, including growing government deficits.
The Greek crisis showed how large deficits can make lenders worry that they will not be repaid, and keep them from making the new loans, stalling the economy.
Canadian Prime Minister Stephen Harper urged his colleagues in advanced nations to cut their deficits in half in three years, but also urged them to make cuts with caution.
"Here is the tight rope that we must walk," he said. "To sustain recovery it is imperative that we follow through on existing stimulus plans those to which we committed ourselves last year 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."
Mr. Harper's point is that cutting deficits too little or too slowly hurts investor confidence. But if nations make the cuts too deeply or too quickly, they risk losing the potential economic stimulus generated by government spending, something that critics say could push the global economy back into recession.
The G20's final communiqu , hammered out by leaders behind closed doors, also offers a compromise on a proposal for a new tax on banks.
