World leaders vow to halve deficits by 2013 (3)

08:49, June 28, 2010      

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Obama's budget plan from February would cut the deficit in half by 2012, as a percentage of GDP. He's also named a commission to examine how to trim the deficit further, to 3 percent of GDP — a level economists generally view as sustainable.

Britain is in worse shape. Its deficit this year is over 10 percent of GDP in 2010.

"For European countries with high budget deficits, especially for the U.K. with the highest budget deficit in the G-20, we have got to make our contribution to that sustainable growth by showing the world that we can live within our means," said British Treasury chief George Osborne.

Obama had urged the G-20 countries to avoid the costly mistake made during the 1930s, when countries reduced government support too quickly and ended up prolonging the Great Depression.
The joint statement made only a passing reference to the need for "greater exchange rate flexibility" and made no specific mention of China's recent announcement that it would allow its exchange rate to rise against the dollar.

That was a victory for the Asian superpower, which has repeatedly said it did not want to be lectured by other powers on exchange rates.

By People's Daily Online / Agencies

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