Harper says G20 must assure markets on deficits

Mon May 17, 2010 3:33pm EDT
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By Louise Egan and David Ljunggren

OTTAWA (Reuters) - World leaders must act more quickly than previously thought to assure markets they will reduce government debt, Canadian Prime Minister Stephen Harper said on Monday.

Speaking to participants in a Canadian youth summit, Harper said the Greek debt crisis and concerns about fiscal health elsewhere highlight the need for the world's leading economies to address the issue decisively at June's G20 summit in Toronto.

"We now need to reassure markets not just that we are prepared to intervene when we have to, but that governments can run responsible and sustainable balances over the long term," Harper said.

"Obviously, markets have a lot of doubt about that ... I think it's pretty critical that this will have to be addressed and I think it'll have to be addressed a lot quicker than probably leaders thought six months ago."

Earlier, Harper said in a statement that he was writing to his fellow G20 leaders to urge they "confront our fiscal challenge with clear and realistic plans for fiscal consolidation, or we can wait for markets to dictate the terms for us."

Canada is host of next month's Toronto summit of the G20, a grouping that gathers major developed and emerging economies representing about 80 percent of global gross domestic product.


Canada's other big push at the summit will be on stronger banking regulation, while firmly resisting efforts to impose a global bank tax.   Continued...

<p>Prime Minister Stephen Harper looks on during a news conference after his meeting with the founding president of the Grand Defi, Pierre Lavoie, at the St-Felicien Wildlife Zoo in St-Felicien, May 14, 2010. REUTERS/Mathieu Belanger</p>