No G20 agreement yet on fiscal targets: Canada

Thu Jun 24, 2010 1:04pm EDT
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By Ka Yan Ng

TORONTO (Reuters) - G20 leaders are still discussing how quickly they should commit to cutting deficits, Canada said on Thursday after European officials complained that fiscal targets proposed by Ottawa did not go far enough.

Canadian Finance Minister Jim Flaherty told reporters that within the Group of 20 advanced and emerging economies, some required urgent action to reduce budget shortfalls, while others could do so at a more leisurely pace.

"There are some more discussions about what the precise targets would be and that's not a settled matter," Flaherty said before a speech to a business audience.

Canadian Prime Minister Stephen Harper sent a letter to his G20 peers last week proposing an agreement to halve deficits by 2013 and stabilize or start reducing debt-to-GDP ratios by 2016.

The European Union's monetary affairs chief, Olli Rehn, told Reuters in an interview those targets were not ambitious enough for the euro zone.

Flaherty said a key issue for the G20 would be striking the right balance between growth and fiscal consolidation.

"There are clearly some countries, particularly some European countries, that need to fiscally consolidate on an urgent basis," he said.

"And then there are some countries that need to fiscally consolidate, but don't need to do so on an urgent basis, so we need some moderation there. That's the delicate balance that we need to try to strike this weekend beginning with fiscal consolidation among those countries that urgently must do so that the markets have confidence."   Continued...

<p>Canada's Minister of Finance Jim Flaherty speaks at the Canadian Consul in New York, ahead of this week's G-8 and G-20 Summits, June 21, 2010. REUTERS/Brendan McDermid</p>