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G20 leaders meet to protect jobs and growth
TORONTO, JUN 27 (Agencies):
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Published on 27 Jun. 2010 11:20 PM IST
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As protesters and police geared up for another day of new confrontations outside the gates of the G20 summit, the leaders inside the fence are meeting to find ways to make sure the world is not plunged back into another recession.
“This meeting is coming at a critical juncture,” said Tiff Macklem, the senior government bureaucrat who has been Prime Minister Stephen Harper’s personal emissary to other countries in preparation for Sunday’s G20 talks.
“This will be a very important discussion.”
The G20 nations convened in the eastern Canadian city of Toronto on the heels of a tough-talking G8 summit, in which the world’s major industrialised powers laid down the law to rogue operators Iran and North Korea. US officials called on leading economies to focus on a return to growth, in a move set to pit the world’s top economy against European nations some of whom have ordered spending cuts to slash back public deficits.
“This summit must be fundamentally about growth, and our challenge, as the G20, is that we all need to act to strengthen the prospects for growth,” US Treasury Secretary Timothy Geithner told reporters.
He took a swipe at powers like Germany, Britain and Japan that he fears have moved too quickly towards budget cuts.
“It’s fair to say that I don’t think that you’ve seen from those countries yet a set of policies that would, again, give everybody confidence that you’re going to see stronger domestic demand growth,” he said.
The G20 talks opened late yesterday with battle lines being drawn as members disagreed over the balance to be struck between reducing budget deficits and encouraging growth and spending. “If it sounds like everyone is rushing to the exit it might cause problems,” a senior G20 official said, summarising the concerns of the US and many emerging powers that Europe’s new parsimony could stifle growth.
Brazil warned Europe’s plans to radically cut government spending would hurt emerging economies, comments echoed by UN chief Ban Ki-moon. “If the cuts take place in advanced countries it is worse, because instead of stimulating growth they pay more attention to fiscal adjustments, and if they are exporters they will be reforming at our cost,” said Brazilian Finance Minister Guido Mantega.
Mr Ban also warned the G20 working dinner that the challenge facing the group had changed from when it first came together in Pittsburgh in September.
“Let me emphasise this evening that, under any circumstances we must not balance budgets on the backs of the world’s poorest people,” he said.
He called for greater investment in agriculture and the green economy which could help fuel jobs. France’s President Nicolas Sarkozy stuck up for Europe, insisting there was no deep trans-Atlantic rift on the deficit issue.
“I’ve heard Obama say how important it is to support sustainable policies, including for the United States, he has indicated quite clearly the risk posed by deficits and debt,” he told reporters.
At the end of two days of talks in an exclusive resort north of Toronto, the leaders of the Group of Eight richest nations acknowledged in their final statement that economic recovery remained “fragile.” The leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the US also took a tough stand on pressing international problems.
They demanded Iran reveal the extent of its nuclear program in transparent talks, condemned North Korea’s alleged sneak attack on a South Korean warship and urged Afghanistan to boost efforts to take charge of its security.
In bilateral talks US President Barack Obama concentrated on ties with Asia, meeting China’s Hu Jintao and assuring his South Korean counterpart Lee Myung-Bak that Washington would stand “foursquare behind” Seoul in its stand-off with the North.
Meanwhile, Harper’s office is standing firmly with Toronto police after they came under criticism from both ends, for being too harsh Saturday night with thousands of peaceful protestors and for showing too much restraint with a handful of violent thugs in the middle of the protest. Some police cars were torched and some downtown businesses were vandalized. About 300 people were arrested.
“Our police services did a magnificent job in order to ensure that these thugs don’t rampage around the city wreaking more havoc,” said Dimitri Soudas, Harper’s chief spokesman.
Inside the leaders’ summit, there is widespread agreement that the massive government spending programs initiated two years ago helped lift the world out of recession. But those spending programs meant the world’s governments racked up massive debts and deficits. In some cases, like Greece or Japan, the debt situation is so bad, it could spark another fiscal crisis.
As a result, G20 leaders are faced with some crucial questions: Do they continue with stimulus to help a recovery that is still described as fragile? Or do they immediately start chopping spending and raising taxes - as Great Britain did last week - at the risk of choking off stimulus-induced recovery?
“It’s really a question of finding the right balance. There is a risk that failure to commit, communicate and move forward on clear, credible fiscal consolidation plans could undermine the recovery,” said Macklem.
In G20-speak “fiscal consolidation” is the code phrase for cutting government spending and/or raising taxes.
“There’s also a risk that if there’s a very rapid synchronized fiscal consolidation across many G20 countries, that could adversely impact the recovery.”
In 2008, the fiscal crisis in other countries spread to Canada, causing hundreds of thousands of layoffs.
“The recession in Canada was not a made-in-Canada recession. It was a made-abroad recession,” said Soudas.
While many European countries want to turn off the spending caps and begin “fiscal consolidation,” the U.S., at least, thinks more stimulus is needed.
Harper is trying to guide the G20 towards his view, which is that stimulus plans agreed to at earlier G20 summits in Washington and Pittsburgh should be allowed to run their course until the end of the year but that the process to cut debt has start right after that.
“These summits are important. When leaders sit around the table, that’s when decisions are made,” Soudas said.
India, Canada set to sign nuke deal
Toronto, Jun 27 (IANS): India and Canada were set to sign a far-reaching nuclear deal, on the lines New Delhi has with the US, here later Sunday, completing a full circle in their wobbly relations since 1974.
The deal is expected to be signed soon after a bilateral meeting between Indian Prime Minister Manmohan Singh and his host and Canadian counterpart Stephen Harper.
Manmohan Singh is the first prime minister in nearly a decade-and-a-half -- after Inder Kumar Gujral -- to visit Canada.
India and Canada were also expected to sign specific pacts on energy, culture and social security while holding talks on a host of bilateral, regional and multilateral issues, officials said.
The nuclear deal will mark a new chapter in India-Canada relations that suffered a setback after Ottawa imposed sanctions on India in the wake of its nuclear tests -- first in 1974 and then again in 1998.
“Canada and India are developing the tremendous potential of our relationship by rapidly expanding commercial, cultural and educational ties,” Harper has said ahead of their meeting.
“I look forward to working with Prime Minister Singh to further capitalize on our shared strengths,” said the Canadian prime minister -- a sentiment that was shared by Manmohan Singh as he left New Delhi for this city.

 
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