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G20 leaders voice support on deficit cut
(Xinhua)
Updated: 2010-06-28 11:00
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TORONTO - Leaders of the United States, Britain, France and Canada on Sunday voiced almost unanimous support to the targets set by the Group of 20 (G20) on advanced economies' debt size, and said they had plans to meet these targets.
"Advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016," said a final document adopted by the G20 leaders during their fourth summit since 2008 in Toronto, Canada.
The G20 commitments on fiscal consolidation assumed significance as world markets are still feeling the deep impact of the European sovereign debt crisis.
At a post-summit press conference, US President Barack Obama said that he has set a goal of cutting the US deficit in half by 2013.
"Because a durable recovery must also include fiscal responsibility, we agreed to balance the need for continued growth in the short-term and fiscal sustainability in the medium term," said the president.
"As I reiterated to my colleagues, after years of taking on too much debt, Americans cannot -- and will not -- borrow and buy the world's way to lasting prosperity," he said.
"Indeed, I've made it clear that the United States will compete aggressively for the jobs and industries and markets of the future," he added.
Obama has earlier set the goal of doubling US exports over the next five years, which he said would support millions of jobs in the country.
The falling revenue amid a deep recession and a huge economic stimulus package had ballooned the US federal deficit to $1.42 trillion in 2009 and is estimated at some $1.6 trillion this year.
Talking about the means to maximize growth at a separate press conference, British Prime Minister David Cameron said: "For some people, particularly countries like Britain, with the biggest budget deficit in the G20, that action has to be fiscal consolidation. It has to be sorting out our debts and our deficits so we get confidence in our economy."
"For some countries, consolidation is not an alternative to growth. It is actually the basis of getting the confidence that will make that growth sustainable. That point has been well and truly understood," the British leader added.
He also noted that the summit document specifically welcomes developments such as Britain's tough emergency budget for countries with large deficits.
As a strong advocate of fiscal consolidation, Canadian Prime Minister Stephen Harper has repeatedly urged G20 members to work on restoring their public finances to prevent a backslide into the global economic crisis.
In his closing remarks on Sunday, the prime minister said the fiscal targets set at the summit showed world leaders have fully understood the necessity and importance of fiscal consolidation.
He said he is confident that Canada will be able to meet its debt target next year.
French President Nicolas Sarkozy told the media after the summit that "some of our friends feared" that cutting deficits "could hurt global growth."
"We explained to them what we were doing in Europe. I believe that the viewpoints came together, including with (US) President Obama," he said.
Sarkozy said individual targets were not agreed for each country, and France has made more stringent promises to its European partners on deficit cutting.
"It's an engagement taken by each member but it's not an instruction of the G20. For example, Japan has not adhered to this objective. That is its right," said the president.
Regarding Japan, the summit declaration read: "Recognizing the circumstances of Japan, we welcome the Japanese government's fiscal consolidation plan announced recently with their growth strategy. Those with serious fiscal challenges need to accelerate the pace of consolidation."