For G20 leaders, fiscal austerity is the new normal

[bijou]

World leaders gathering in Canada at the end of this week for the G8 and G20 summits will tackle deep divisions on at least two crucial issues.

The U.S. is at odds with almost everyone in pushing for continued government stimulus spending to prevent a stalled economic recovery. And China will face an unprecedented chorus of disapproval over an artificially weak currency widely seen as stealing jobs from regions as varied as southern Ontario, Vietnam and U.S. industrial Midwest.  ... Here’s a look at what five heads of government will be seeking from the G8-G20 discussions:

David Cameron, 43, the rookie British prime minister, will soon be imposing the most severe government cutbacks since the Second World War. With annual debt-service payments alone projected at $110 billion within five years – equal to current spending on education, transportation and efforts to curb global warming combined – Cameron has latched onto Canada’s painful but effective deficit-cutting regime of the mid-1990s as his model for fiscal recovery.

The government of then-PM Jean Chretien “asked probing questions about every part of government spending,” George Osborne, the incoming British finance minister told Parliament earlier this month.

“They engaged the public in the choices that had to be made and they took the whole country with them. That is what we will seek to do.” ... Angela Merkel, 55, the German chancellor, finds herself the reluctant savior of the eurozone, in the aftermath of a sovereign-debt scare this year that has been the worst economic crisis in the 53-year history of the European Union.

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http://www.thestar.com/news/gta/torontog20summit/article/825700--olive-for-g20-leaders-fiscal-austerity-is-the-new-normal

[JohnnyReb]

"I was for it before I was against it."....John K.

"We Have to pass it before we can see what's in it."....Nancy P.

"We have to spend all we can before we go bankrupt."....The Big O and fellow DUmmies thinking.

Well, Big O may not have said that but it's right in line with their way of thinking.

[Chris_]

http://news.yahoo.com/s/nm/20100619/bs_nm/us_germany_g20_merkel

BERLIN (Reuters) – Europe will push for a swift exit from fiscal stimulus programs and a focus on budget consolidation at the G20 meeting next week, German Chancellor Angela Merkel said on Saturday.

"European participants are of the opinion that this is urgently necessary to prevent such crises from happening again in the future," Merkel said in her weekly podcast.

Leaders of the 20 biggest developed and developing economies meet on June 26-27 in Toronto, Canada.

Merkel's stance contrasted with that of U.S. President Barack Obama, who this week said public finance problems should be addressed "in the medium term" -- a warning that clamping down budgets should not be done at the expense of recovery.

European governments have been launching austerity measures to head off a spread of the debt crisis begun in Greece.

doc

[Chris_]

"Austerity measures"... because calling it "cutting spending" is too scary?

[Lacarnut]

Probably all talk and no actions. You will see riots when union workers start getting laid off. Greece and Spain are supposed to make 6% cuts.