UPDATE 1-Canada to G20: keep your promises or become a "paper tiger"

Sun Nov 4, 2012 8:26pm EST
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* Canada will propose an accountability mechanism for G20

* Canada could fall into recession if U.S. "fiscal cliff" not avoided

* U.S. should commit to halve deficit in medium term, won't meet 2013 target

By Louise Egan

MEXICO CITY, Nov 4 (Reuters) - The G20 risks becoming a "paper tiger" unless countries follow through on commitments aimed at preventing another global economic crisis, Canada's finance minister said on Sunday, fingering the U.S. "fiscal cliff" as the greatest risk.

Flaherty spoke to reporters as some of the world's major economies looked set to miss agreed deadlines for reducing their fiscal deficits and for implementing new bank capital rules to safeguard against taxpayer bailouts the next time they run into trouble.

"It's important to keep the G20 as an effective organization, that member countries keep their commitments. Otherwise it becomes a paper tiger," Flaherty told reporters as he headed into a meeting of G20 finance ministers and central bankers in Mexico City that ends Monday.

Flaherty will propose to his G20 peers Sunday night that the group adopt a formal mechanism for holding countries to account for broken promises. He said the results should be made public.

"Yes, it does mean assessing the performance of G20 economies," he said.   Continued...