Harper, Obama urge G20 to boost economic recovery
Last Updated: Friday, June 18, 2010 | 3:52 PM ET
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U.S. President Barack Obama and Canada's prime minister, Stephen Harper, each issued a call to their G20 colleagues Friday, urging nations to work together to solidify the economic recovery.
In a letter to G20 leaders dated June 16 but released publicly Friday, Obama asked the U.S.'s G20 trading partners to work closely with him "to safeguard and strengthen the recovery" from the near collapse of the global economic system in the fall of 2008.
Canadian Prime Minister Stephen Harper has warned fellow world leaders to get their federal deficits under control. (Nathan Denette/Canadian Press) Looking ahead to the coming G20 summit in Toronto, Obama noted that "significant weaknesses" linger among the major and developing economic powers.
"It is essential that we have a self-sustaining recovery that creates the good jobs that our people need."
Obama said the June 25-27 meetings should also focus on efforts to stabilize public debt while being careful about withdrawing stimulus programs too quickly during times of slack demand and general business sluggishness.
In his own open letter to leaders, Harper stressed the need for deficit-prone nations to get their debts under control.
"We believe it is important to stay the course for now, but with an important caveat," he writes in the introduction to a University of Toronto publication on the G20 summit that was scheduled to be made public later on Friday.
"Recent events are highlighting the real risks to highly indebted countries that lack exit strategies from large budgetary deficits," Harper warns, referring to the sovereign debt crisis in Greece that prompted an unprecedented trillion-dollar rescue plan last month.
The differing key ideas expressed in the two letters — one focusing on debt, the other on stimulus — points to the differences between the U.S. and the Canadian economies.
Canada emerged from the recession comparatively well, posting a robust 6.1 per cent annual pace of growth in the recently completed quarter. Ottawa has moved to unwind deficit spending as early as next fiscal year.
But the recovery in the United States has come in fits and starts. In his letter, Obama stressed that the recovery won't last unless the rest of the world does its part and boosts demand.
Obama pitches stimulus
Though tackling debt remains a long-term priority, earlier this month, Obama again issued a plea for more stimulus spending as insurance against another recession, but the measure fell victim to election-year anxiety over huge federal deficits, despite being pared back by Democratic leaders.
In the letter released Friday, Obama said: "I am committed to the restoration of fiscal sustainability in the United States and believe that all G20 countries should put in place credible and growth-friendly plans to restore sustainable public finances.
"But it is critical that the timing and pace of consolidation in each economy suit the needs of the global economy, the momentum of private sector demand and national circumstances."
The recovery from recession in the United States has been erratic and uneven. The economy is expanding but at a weaker pace than in many previous recoveries.
Harper's letter provides a glimpse at what he hopes can be accomplished at the upcoming G8 and G20 summits. According to Harper, the G20, which includes the 20 largest economies, should be the world's decision-maker for economic affairs.
But the G8, which comprises the world's eight most industrialized nations, is still a vital force for peace, security and development, since those issues require like-minded countries to work together.
He designated the G8 as being the appropriate forum to discuss climate change, which may rankle some who want the issue to take centre stage at the larger G20 meetings.
With files from The Associated Press and The Canadian PressShare Tools
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