G20 Agrees on Deficit Cuts by 2013

World leaders of G-20 countries wave during a photo group session at the G20 Summit at the Toronto Convention Center in Toronto, Ontario, Canada on 27 June 2010. World leaders gathered for three days of talks. Photo by EPA/BGNES

Leaders at the G20 summit in Canada have agreed to cut national budget deficits while endeavoring to promote economic growth.

Host Stephen Harper, the Canadian prime minister, said that despite these cuts, short-term economic stimulus measures would still be needed.

Correspondents note that every major G20 country had already committed to halve deficits within three years.

Proposals for a global levy on banks have been dropped, Harper said.

Instead, that will be left to individual countries.

Harper also said government debt, as a proportion of the economy, "should be at least stabilised or on a downward trend by 2016".

He added: "All leaders recognise that fiscal consolidation is not an end in itself. There will be a continued role for ongoing stimulus in the short term as we develop the framework for strong sustainable and balanced growth."

The group of 20 leading and emerging nations had been split over the pace of budget cuts.

US President Barack Obama warned against fast and deep budget cuts, fearing damage to global growth.

But European members, including the UK, France, and Germany, have already led moves to slash record public deficits, despite opposition from the United States which is expected to run a .3tn deficit in 2010.

Emerging economies such as Argentina and Brazil had worried that budget cuts in rich countries would hurt their export-dependent economies.

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