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G20 meeting sees leaders get more time on budget cuts

After agreeing to slice budget deficits in half by 2013, G20 countries are backtracking on those promises claiming that cuts might hurt the global economy.

G20 mexicoEnlarge
The General Secretary of the Organisation for Economic Co-operation and Development (OECD), Mexican Jose Angel Gurria, Mexican Secretary of Finance and Public Credit, Jose Antonio Meade and the President of the World Bank, Korean-US Kim Jim Yung, speak before a press conference in Mexico City on November 4, 2012, in the framework of the G20 Finance Ministers' and Central Bank Governors' meeting. (Yuri Cortez/AFP/Getty Images)

G20 leaders gave themselves more time in cutting budget deficits Tuesday during a two-day conference in Mexico.

After agreeing to slice budget deficits in half by 2013, G20 countries are backtracking on those promises claiming that cuts might hurt the global economy.

"In light of the weak pace of global growth, they will ensure that the pace of fiscal consolidation is appropriate to support the recovery," G20 policymakers said in a communique, according to Reuters.

"Global growth remains modest and downside risks are still elevated."

The initial target was drawn up at the 2010 G20 in Toronto but slow growth has stalled any hope of reaching that goal.

The IMF has predicted that global growth would shrink to 3.3 percent and that unemployment would remain high.

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AFP said the meeting centered around the European debt crisis and a looming "fiscal cliff" in the United States - automatic spending cuts that could leave the nation's bills unpaid.

Tuesday's presidential election likely meant that the US delegation was not ready to make serious commitments or be specific about policy proposals.

Still many representatives worried about the state of the US economy.

"If we're not able to resolve the cliff, that could be the tipping point for a much more complicated scenario in the world economy," Chile's finance minister, Felipe Larrain, told Reuters.

Japan was also a worry for meeting attendees, as was commodity markets, which could face further "supply shocks."

Reuters said that the meeting was mainly attended by deputies rather than top heads of state or their finance ministers.

http://www.globalpost.com/dispatch/news/business/121105/g20-meeting-sees-leaders-get-more-time-budget-cuts