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G20 to adopt debt targets proposed by Canada

Heads of state attend the first plenary session of the G20 summit on June 27, 2010 at the convention center in Toronto, Ontario. ERIC FEFERBERG/AFP/Getty Images)

June 27, 2010

TORONTO (THEWINDSORSTAR)  – Leaders of the G20 have agreed to a proposal Sunday from Prime Minister Stephen Harper to accept concrete targets on cutting their deficits and paying down debt, according to a summit communique obtained by Canwest News Service.

While police once again locked horns with protesters on the streets of Toronto, the prime minister was actively lobbying his fellow leaders to forge a consensus among nations with different economic outlooks on the best way to sustain the global recovery.

Canada has been pushing for G20 countries to cut their deficits in half by 2013, and at least stabilize their debt-to-GDP ratios by 2016. On Sunday afternoon, just hours before the summit was to end, a communique described as “99 per cent” complete suggested that Harper won the day.

According to the draft document obtained by Canwest News Service, countries agreed to implement “growth friendly fiscal consolidation plans.”

“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,” it said.

Beyond making that commitment to a benchmark, the nations are free to decide through their own policies about how to get there through a mixture of spending cuts or tax hikes.

“Recognizing the unique 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. Fiscal consolidation plans will be credible, clearly communicated, differentiated to national circumstances and focused on measures to foster economic growth.”

The prime minister repeated his call for the G20 to adopt his proposed targets in his opening remarks as the summit’s plenary session on Sunday. Harper said the group needed to “act with the same unity of purpose, the same of urgency and the same commitment to the enlightened exercise of our national sovereignty, as we did in the depths of the crisis.”

“The recent skittishness of markets is telling us that they are awaiting our actions, actions that must be decisive, but also co-ordinated and balanced,” Harper said. “Here is the tightrope that we must walk to sustain recovery. It is imperative 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.”

But U.S. President Barack Obama, as well as Indian Prime Minister Manmohan Singh, have warned that the global economic recovery could be imperiled if governments move too quickly to wind down the massive public spending programs they launched during the financial crisis.

Earlier Sunday, Harper’s chief spokesman admitted the negotiations on spending targets wouldn’t be easy.

“Nobody said that the task of G20 leaders agreeing to specific targets . . . is going to be easy. Nobody said that it also was going to be achieved,” Dimitri Soudas, Harper’s director of communications, told reporters in a briefing Sunday morning.

He noted it would be the first time that G20 leaders agree on quantifiable debt benchmarks with specific time frames since they met in Washington in fall 2008, at the peak of the financial crisis.

Harper estimated that co-ordinated action by the group could boost global output by a cumulative 6.5 per cent over the next five years, create 52 million new jobs and lift 90 million people out of poverty.

“But if we fail to take decisive, co-ordinated and balanced actions, a bleak scenario might emerge where millions of people could lose their jobs,” the prime minister said. “This is the responsibility we have, not only toward our constituents, but also toward all the citizens of the world. We must go on to lay the foundation for strong, sustainable and harmonious growth.

The leaders will also discuss the issue of how to “rebalance” the world economy so that countries with big trade surpluses, such as China, take steps to stimulate demand in their own countries. The United States, in particular, is expected to further press China to adopt a more flexible exchange rate.

Reforms to the global financial system will also be on the agenda. The European Union has been lobbying for the G20 to embrace a bank tax that would be used to fund any future bailouts, but Canada and other countries have argued that the way to prevent any further financial crises is to impose tougher capital and liquidity standards on banks.

Taking over as G20 summit host after the conclusion of the G8 summit on Saturday, Harper said a “sensible consensus” appeared to be emerging on both economic strategy and financial reforms.

Nonetheless, Harper acknowledged that there remain “tensions” within the group over how long governments should continue spending public funds to stimulate their economies.

“We all, I think, know what the critical issues are going forward,” said the prime minister.

“At the same time, we also know that there are tensions there that are real in terms of stimulus, in terms of effects on economic growth.”

At the height of the global financial crisis, the G20 demonstrated unprecedented co-operation on the need to lower interest rates and pump fiscal stimulus into the economy.

In turn, it supplanted the G8 as the premier political forum for dealing with economic matters. But as the crisis fades into the rear-view mirror, and as individual countries bounce back from the recession at different speeds, the group’s unity has begun to unravel.

Indeed, Canada’s belt-tightening message could yet be undermined by the United States, which is considering another round of stimulus spending to ensure it doesn’t fall back into recession.

World Leaders Gather for G20 Economic Summit

General view of a G8 summit working session at the Deerhurst Resort in Hunstville, Ontario, 26 Jun 2010
General view of a G8 summit working session at the Deerhurst Resort in Hunstville, Ontario, 26 Jun 2010

June 27, 2010

(KATAKAMI / VOA) World leaders have gathered in Toronto for the Group of 20 summit to discuss how to sustain the still-fragile global economic recovery.

A draft communiqué for Sunday’s summit says the top industrialized and emerging nations have had good results from their efforts so far, but notes that “serious challenges remain.”

The G20 leaders say the recovery is “uneven and fragile,” with unemployment in many countries at unacceptable levels.  The group also says work is needed to reform financial institutions.

On Saturday, U.S. Treasury Secretary Timothy Geithner urged world leaders to find the correct balance between economic stimulus and deficit reduction.  He said Japan and some European countries must do more to boost domestic demand rather than just trying to cut their budgets.

He made the comments in Toronto ahead of a working dinner hosted by Canadian Prime Minister Stephen Harper, attended by U.S. President Barack Obama and other G20 leaders.

Mr. Obama and others say they are concerned that cutting spending too drastically could stifle economic growth.

Protesters faced off with police Saturday in Toronto, smashing storefronts and torching police cars.  At least 130 people were arrested.  Canada has spent more than $1 billion on security for the two summits taking place in the country.

The G20 summit follows a 2-day meeting of the Group of Eight leading industrial nations in Muskoka, north of Toronto.

The G8 leaders issued a final statement Saturday condemning North Korea for the sinking of a South Korean navy ship, which left 46 sailors dead.  The G8 also repeated its call for Iran’s leaders to do more to respect freedom of expression and the rule of law.

After the G8 Mr. Obama flew to Toronto by helicopter with British Prime Minister David Cameron.  President Obama also held one-on-one meetings with Chinese President Hu Jintao and South Korean President Lee Myung-bak, among others.

In addition to the G8 nations – the United States, Britain, France, Germany, Italy, Japan, Canada and Russia – the larger G20 includes Brazil, China, Indonesia, Mexico, Argentina, Australia, India, Saudi Arabia, South Africa, South Korea, Turkey and the European Union.

Thousands protest summit in Canada; vandals smash windows, torch police cars


June 26, 2010

TORONTO (KATAKAMI / FOX NEWS/AP) — Black-clad demonstrators broke off from a crowd of peaceful protesters at the global economic summit in Toronto Saturday, torching police cruisers and smashing windows with baseball bats and hammers. Police arrested more than 150 people.

Police used shields, clubs, tear gas and pepper spray to push back the rogue protesters who tried to head south toward the security fence surrounding the perimeter of the Group of 20 summit site. Some demonstrators hurled bottles at police.

“We have never seen that level of wanton criminality and vandalism and destruction on our streets,” Toronto police chief Bill Blair said.

The roving band wearing black balaclavas shattered shop windows for blocks, including at police headquarters, then shed some of their black clothes, revealing other garments, and continued to rampage through downtown Toronto.

Protesters torched at least three police cruisers in different parts of the city, including one in the heart of the city’s financial district. One protester jumped on the roof of one before dropping a Molotov cocktail into the smashed windshield.

Blair said the goal of the militant protesters was to draw police away from the security perimeter of the summit so that fellow protesters could attempt to disrupt the meeting.

Police arrested at least 150 people Saturday, but Blair said many suspects remain at large.

Blair said officers have been struck by rocks and bottles and have been assaulted, but none was injured badly enough to stop working.

A stream of police cars headed to Toronto to reinforce security there after the smaller Group of Eight summit ended in Huntsville, Ontario, about 140 miles (225 kilometers) away. Security was being provided by an estimated 19,000 law enforcement officers drawn from across Canada, and security costs are estimated at more than US$900 million.

The vandalism occurred just blocks from where President Barack Obama and other world leaders were meeting and staying.

“These images are truly shocking to Canadians,” Canadian Public Safety Minister Vic Toews said in a statement. “We are taking all measures necessary to ensure Canadians, delegates, media and international visitors remain safe.”

Previous major world summits also have attracted massive, raucous and sometimes destructive protests by anti-globalization forces.

Police in riot gear and riding bikes formed a blockade, keeping protesters from approaching the security fence a few blocks south of the march route. Police closed a stretch of Toronto’s subway system along the protest route and the largest shopping mall downtown closed after the protest took a turn for the worse.

“Free speech is a principle of our democracy. But the thugs that prompted violence earlier today represent in no way shape or form the Canadian way of life,” said Dimitri Soudas, the chief spokesman for Canadian Prime Minister Stephen Harper.

A media bus taking photographers and cameramen to a hotel where the G-20 leaders will have dinner was turned back after police deemed it unsafe.

Dozens of police officers later boxed in a number of protesters from both sides of a street in a shopping district. The protesters encouraged the media to film it and they sang ‘O Canada’, Canada’s national anthem, before being allowed to disperse.

At another location at the provincial legislature police also boxed in demonstrators before tackling some and making arrests.

Saturday’s protest march, sponsored by labor unions and dubbed family friendly, was the largest demonstration planned during the weekend summits. Its organizers had hoped to draw a crowd of 10,000, but only about half that number turned out on a rainy day.

Toronto’s downtown resembles a fortress, with a big steel and concrete fence protecting the summit site.

On Friday, hundreds of protesters moved through Toronto’s streets, but police in riot gear intercepted them, preventing them from getting near the summit security zone downtown.

Previous global summit protests have turned violent. In 1999, 50,000 protesters shut down World Trade Organization sessions in Seattle as police fired tear gas and rubber bullets. There were some 600 arrests and $3 million in property damage. One man died after clashes with police at a G-20 meeting held in London in April 2009.

At the September G-20 summit in Pittsburgh, police fired canisters of pepper spray and smoke and rubber bullets at marchers.