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G-20: Financial Chiefs Strategize Economic Sustainability

By on November 6, 2012

 

In the wake  of the U.S elections, financial chiefs from the 20 leading economies in the World have resolved in Mexico City to  strategize and restructure to meet the target of cutting budget deficits where necessary.

It can be recalled at a G-20 summit in Toronto 2010 it was agreed that for the global economy to heal from the post recession era, definite fiscal plans must be taken to stem the tide.

But in a very complicated situation, participants at the summit are having serious debates and contention over the initial commitments of key economies to cut budget spending and increase taxes.

Top on the agenda has been the U.S fiscal challenge which could pose potential challenges for the global power. While  the U.S needs to  bring its deficit under control its budget gap surpassed $1 trillion for  the fourth  year in a row in 2012.

The International Monetary Fund Managing Director Christine Lagarde  believes budget tightening  should be ‘structurally targeted rather than fixated on nominal targets’.

German Finance Minister  Wolfgang Schaeuble the strict and no nonsense man stated at the conference that  the Deutschland was hitting its deficit targets ‘With all due modesty, we would urge others to meet their obligations’, he said.

The G-20 summit also recommitted to implementing tough new bank capital rules on time. The rules known as Basel III, are the world’s response to the financial crisis and are set to be phased in with effect from January.

With the Greece, Spanish and the United States in precarious economic states due to debt crisis and budget deficit challenges,  the Finance leaders of the leading economies believe the time has come for proactive steps to be taken on the global  economy.