Harper to urge 'fiscal consolidation' in G20 letter
17 May 2010 | 
Author: Professor |
CTV News 16 May, 2010
Prime Minister Stephen Harper is urging members of the G20 to work on restoring their public finances to prevent a back-slide into the global economic crisis.
In anticipation of the G20 Summit to be held in Toronto this June, the prime minister will be sending a letter Monday to the leaders of attending nations, laying out the financial challenges ahead.
In a copy of the letter obtained by CTV News, Harper notes that while much has been achieved on the economic front since the G20's first meeting in Washington two years ago, governments must now take swift and bold action to set their respective countries on the path to fiscal sustainability.
He points to growing international concern over the financial developments in Europe, and stresses the need for countries to work together while strengthening their domestic financial regulations.
"We must continue to fulfill our international obligation to fully implement our stimulus plans to avoid a slide back into financial or economic crisis," Harper writes.
"However, as the recovery becomes entrenched and our stimulus plans expire, we cannot afford to rest on our laurels. We must quickly turn our attention to the next major issue facing our countries and the G20 as a whole, that is, the issue of restoring our public finances, or, as many economists put it, implementing fiscal consolidation."
Leaders of the G20 face a fundamental choice, Harper writes: "We can confront our fiscal challenge with clear and realistic plans for fiscal consolidation, or we can wait for markets to dictate the terms for us."
Governments must draft realistic plans that match each country's needs and circumstances, acting with the same "focus, speed and determination as we did at the onset of the global recession."
Those plans must, to the greatest extent possible, lay out strategies for long-term economic growth, the prime minister writes.
"While the pace and time frame for the return to fiscal sustainability will depend on conditions in each country, it will be imperative for our countries to coordinate their policy mix to ensure consistency with the G20 Framework for Strong, Sustainable and Balanced Growth."
Harper concludes by reaffirming Canada's desire to collaborate with its G20 partners on these shared goals.
Canada was among a handful of G20 nations to recently endorse the drastic austerity measures Greece is putting in place in the wake of its financial collapse, as well as the intervention of the European Union and the International Monetary Fund.
The Toronto summit, to be held June 26 and 27, represents the fourth meeting of the G20. The group was established in 1999 following the Asian financial crisis of 1997. Another summit is scheduled this fall in Seoul.
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