G-20 nations for balanced approach to growth, fiscal deficit

V S Chandrasekar
Toronto, Jun 28 (PTI) With the global economy on its way
to recovery amid debt crisis in some European nations, the
G-20 countries Monday called for striking a balance between
stimulus measures to sustain economic expansion and reducing
fiscal deficit to tackle the mess of government finances.
In a declaration after the two-day meeting of the bloc
here, the countries also put out a compromise on the different
stands of the member nations on bank tax by leaving it to the
member countries to levy it or not, which is India's position.
The bloc, considered better representative body than rich
nations grouping of G-8, resolved to continue with free
international trade and refrain from protectionist measures.
"While growth is returning, the recovery is uneven and
fragile, unemployment in many countries remains at
unacceptable levels, and the social impact of the crisis is
still widely felt. Strengthening the recovery is key," the
declaration said.
To sustain recovery, there is a need to follow through on
delivering existing stimulus plans, while working to
create the conditions for robust private demand, it added.
At the same time, it also noted,"...recent events
highlight the importance of sustainable public finances and
the need for our countries to put in place credible, properly
phased and growth-friendly plans to deliver fiscal
sustainability, differentiated for and tailored to national
circumstances."
Those countries with serious fiscal challenges need to
accelerate the pace of consolidation, it added. Advanced
economies have committed to fiscal plans that will halve
deficits by 2013 and stabilise or reduce government debt by
2016.
With India among other nations opposing global bank tax,
the declaration said,"We recognised that there are a range of
policy approaches... Some countries are pursuing a financial
levy. Other countries are pursuing different approaches."
The declaration said the nations should have a prudential
and supervisory norms for the financial sector.
It also said financial sector should make a fair and
substantial contribution to the government interventions at
the time of downturn. India's stand has been that prudent
regulations also add to the cost of financial sectors and they
could be considered their contribution.
"The G-20's highest priority is to safeguard and
strengthen the recovery and lay the foundation for strong,
sustainable and balanced growth, and strengthen our financial
systems against risks," the statement said.
With the global economic crisis leading to the sharpest
decline of trade in more than seventy years, G-20 nations
renewed for a further three years till the end of 2013 their
commitment to refrain from raising or imposing barriers to
international trade and investment. (More) PTI VSC
MRD


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