The G20 started today’s meeting in Toronto, Canada, with consensus on the need to reduce the deficit and debt of the countries in the next three years to bolster economic recovery in but discrepancies in the amount of trimming.

The issue of when and how to remove the economic incentives were launched to overcome the crisis has become the main source of friction within the G20, which groups the major developed and developing countries and has emerged the guardian of the global economy.

On one side of the debate are countries like the U.S., insisting as he made clear today the country’s Treasury Secretary Timothy Geithner that the G20 should focus primarily on growth, a position shared by emerging powers such as Brazil.

On the other side of the spectrum is the European Union, with Germany at the head, which maintain that cutting public spending is the priority.

This was made clear today, German Chancellor Angela Merkel, who said at the end of the G8 meeting, which ended hours before the start of G20, the global economy growth will only “durable and sustainable if countries strengthen their financial” and implementing structural reforms at the same time.”

Brazilian Finance Minister Guido Mantega, who represents his government in the summit at having to leave President Luiz Inacio Lula da Silva by floods in the country, warned that fiscal consolidation is important.

He warned, however, that the incipient and uneven global economic recovery may be “threatened” by “hurry the withdrawal of stimuli.”

Despite this push and pull on the theme that emerges as a key to the economies footing again today in Toronto were observed forays between opposing positions.

Merkel herself said , in that sense , there is “consensus” on the need to reduce the expense and Canadian Prime Minister Stephen Harper, who has proposed to cut the deficit in half by 2013, that consensus called “strong”.

Beyond was even president of the European Commission Jose Manuel Durao Barroso, who spoke during a press conference to the existence of a preliminary agreement to reducing the deficit in half by 2013 as suggested by Harper.

Mantega noted, however, that an agreement in this regard is far from closed and called unrealistic even such a proposal.

“It is very draconian a little difficult, a bit exaggerated, “he said at a news conference today Mantega, recalling that “there are countries with deficits above 10 percent” and will not be possible to achieve the objective set.

While waiting for the leaders of the G20 limens protrusions on that front today and tomorrow, another issue is emerging as controversial is the proposal to impose a global tax on the banking or financial transactions that fund .

United States, United Kingdom, Germany and France lead this crusade but emerging countries like Brazil have made it clear that they disagree.

“We’re not going to agree with that, “said Mantega today, others argue that this is a measure to be applied individually by countries that so wish.

It is expected, moreover, that the G20 tomorrow a new impetus to the proposal to strengthen banks capital and enhance transparency in the sector, according Mantega measures would be adopted at the group’s next meeting in November in South Korea.

It is expected that the final communiqué to be issued tomorrow to allude also to seek alternatives to the Doha Round and subsidies for fossil fuels.

The G20 meeting started today with a state dinner and continues tomorrow, Sunday, with the plenary meeting of the group.

Filed under: finance

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