Economics: Global: G20 negotiate pledges to cut deficits by half, by 2013

With the G20 busy at its intergovernmental business -- yesterday having been the scene of on-location riots, clubbings, bloodied protesters, and 16,000 police resisting the violent protesters, and maintaining security for the leaders of the twenty countries -- the focus of the assemblage turned to cutting deficits by 2010, in order to avoid global financial crises. An article by Ellen Hasenkamp stresses the concensus emerging at this year's G20:

The heads of the world's major industrialized powers agreed to adopt what they dubbed "growth-friendly deficit reduction" proposals, but applied on a country-by-country basis, bowing to concerns from emerging nations.

"Recent events highlight the importance of sustainable public finances," said a draft final summit statement obtained by AFP.

In the document, leaders promise to put in place "plans to deliver fiscal sustainability, differentiated for and tailored to national circumstances."

The plan, which we can call 'the Merkel Plan," is to cut in half the deficits of the leading industrial nations -- the European stars Britain, France and German, with the USA, and Canada -- by 2013.

The deal will mark a minor triumph for European leaders, led by German Chancellor Angela Merkel, who have pushed to rein in ballooning debt despite fears from the United States that it would stifle fledgling growth.

Merkel stressed, however, that the deal, which also includes a plan for nations to stabilize or reduce government debt-to-GDP ratios by 2016, would only apply to the most developed industrialized nations.

"This is an important common goal that will lead to sustainable growth," she told reporters. "We as Europeans can say that our path has found support.

-- Ellen Hasenkamp, "G20 leaders aim for deal to cut deficits by 2013," Agence France Presse via Yahoo!News )Jun27,2k10).

Brazil and the UN's Ban Ki-moon raised objections, saying the move woud hurt poorer nations.

-- EconoMix