September 22, 2011

Harper’s plan for balanced, sustainable growth wins support from G20

VINCE VERSACE

staff writer

The support of G20 nations for Canada’s proposal to aggressively slash deficits helps cement a path to sustainable economic recovery, states Canada’s prime minister. G20 leaders have agreed to slash national deficits in half by 2013 and that by 2016 government debt-to-GDP ratios should be stabilized or be in decline.

Leaders also agreed to support economic growth policies, recognizing that some countries will start cutting their budget deficits later than others.

“The goal was always the same — to have a global plan to ensure recovery and have strong economic growth which will need to be balanced and sustainable,” said Stephen Harper at the close of the G20 Toronto summit. “It is the framework we developed for a strong and sustainable recovery. We have a common goal and we all understand this and that is the foundation of our action.”

Harper said the G20’s declaration puts “some of the meat on the bone” for what they are hoping to achieve by the end of the year. Summit analysts agreed that many of the G20’s deadlines are slated for its November summit in South Korea. The Toronto summit was considered a progress report with the goals of co-ordination and beginning to tackle some financial regulation changes.

“We are building a more resilient financial system that serves the needs of our economies, reduces moral hazard, limits the build-up of systemic risk and supports strong and stable economic growth,” he said.

G20 members have agreed to provide for transparent international assessment and peer review, a commitment to design and implement contingency funds to offset a financial collapse and strengthening financial market infrastructure through regulatory oversight of hedge funds and credit rating agencies.

Harper described the global economic recovery as a “tightrope that we must walk” earlier in the summit and said nations need to see through their existing stimulus plans. However, as he and his representatives stressed at both summits, advanced economies need to implement fiscal consolidation measures in a “growth-friendly” manner.

“We recognize that these measures will need to be implemented at the national level and will need to be tailored to individual country circumstances,” said Harper.

The G20’s plan is, in most cases, minimum objectives to pursue, he said. Canada will likely meet the deficit and debt-to-GDP goals by next year.

U.S. President Barack Obama said that the G20 is the premier body “for economic cooperation” in order to “forge a co-ordinated response to the worst economic crisis of our time.” Though there is still more work to be done, to ensure sustainable recovery, measures taken by the G20 at the recent London and Pittsburgh summits set the stage to help achieve one goal, he said.

“We have pulled ourselves from the brink,” Obama said.

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