Group of 20 governments disagreed over the strength of new fiscal goals as they risk missing the targets set three years ago.
After committing at a Toronto summit in 2010 to halve budget deficits by this year, most advanced nations are now facing failure on that score and on a related pledge to stabilize their debt by 2016.
As G-20 finance chiefs meet in Moscow, the challenge now is to find a replacement for the Toronto goals after weak economic growth hamstrung fiscal consolidation worldwide. While German Finance Minister Wolfgang Schaeuble advocated “concrete” targets, Russian official Ksenia Yudaeva said formal commitments would be “counterproductive.”
“We might want to have long-term principles and particular strategies for countries with high deficit levels,” Yudaeva, Russia’s G-20 sherpa, said in an interview. “But I don’t think we need any precise commitments like during Toronto. It should be much more flexible.”
The G-20 will discuss adopting a new deadline for deficit goals and may set 2016 as the new target date, Russian Finance Minister Anton Siluanov said today. Given the debt burden of industrial nations, “a credible path of debt reduction is really essential and the positive environment should be used by the G-20 countries,” Schaeuble said.
Read More at bloomberg.com . By Ilya Arkhipov and Rainer Buergin.