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G20 leaders warn against complacency

City A.M. Reporter
THE Group of 20 major economies will warn against complacency in tackling the global economic crisis and say sickly public accounts could hit long-term growth, according to a draft document.

The draft version of the summit communiqué, obtained ahead of a G20 leaders meeting this weekend in Toronto, reflected the different views within the G20 on how to proceed with economic policy.

The draft, dated 11 June, said the recovery was “uneven and fragile” with unemployment at unacceptable levels. “There is no room for complacency,” it said.

At the same time, it said “fiscal challenges in many states are creating market volatility, and could seriously threaten the recovery and weaken prospects for long-term growth.”

The United States has argued for continued stimulus spending by governments to ensure the global economic recovery does not fizzle out.

Other countries, such as Germany, intend to cut spending quickly in order to bring down public debts and deficits.

“Further actions are still required to address the underlying causes of the global financial crisis and promote more responsible and transparent banking sectors,” it said.

Reforms of banking around the world, along with ways to ensure the recovery of the global economy, are high on the agenda of the summit.

The draft said the G20 would push for conclusion of a long-delayed world trade deal and would pledge to extend a commitment not to raise barriers to investment or trade for three more years, through 2013.

G20 nations converge on 26 to 27 June as Europe fights a debt crisis and the US battles high joblessness.