President Obama urges G-20 nations to spend; they pledge to halve deficits

By Howard Schneider and Scott Wilson
Washington Post Staff Writer
Monday, June 28, 2010

TORONTO -- President Obama warned Sunday that the world economic recovery remains "fragile" and urged continued spending to support growth, an expansionist call at the end of a summit marked by an agreement among developed nations to halve their annual deficits within three years.

The president's remarks tempered the Group of 20's headline achievement at the summit, a deficit-reduction target that had been pushed by Canadian Prime Minister Stephen Harper, the host of the meeting and a fiscal conservative. Although there is broad agreement that government debt in the developed world needs to be reduced, there is concern that cutting too fast and too deeply will slow growth and possibly spark a new recession.

In a news conference at the meeting's conclusion, Obama said that the world's largest economic powers had agreed on the need for "continued growth in the short term and fiscal sustainability in the medium term."

"A number of our European partners are making difficult decisions," Obama said. "But we must recognize that our fiscal health tomorrow will rest in no small measure on our ability to create jobs and growth today."

(More here.)