The Globe and Mail

The Group of 20 will adopt deficit- and debt-cutting targets proposed by Prime Minister Stephen Harper but allow governments to attack their fiscal gaps as their own economic dynamics dictate.

G20 leaders pledge to "take all necessary steps ... fully within agreed timelines," according to a leaked draft of the summit communiqué.

"Measures will need to be implemented at the national level and will need to be tailored to individual country circumstances," the document says. "We will each identify additional measures, as necessary, that we will take toward achieving strong, sustainable, and balanced growth.''

The communiqué adds that "advanced economies" commit to the targets urged by Mr. Harper, to cut deficits in half by 2013 and "stabilize or reduce" overall debt-to-GDP levels by 2016.

"We are committed to taking concerted actions to sustain the recovery, create jobs and to achieve stronger, more sustainable and more balanced growth," it says. "These will be differentiated and tailored to national circumstances.”

The more immediate targets would be ambitious for many countries. For example, Japan's current fiscal strategy seeks to halve the deficit relative to gross domestic product by fiscal 2015, and to achieve a surplus by 2020.

Here is the tightrope we must walk... To sustain the recovery, it is imperative that we follow through on existing stimulus plans. — Canadian Prime Minister Stephen Harper

“Honestly, this is more than I expected, because it is quite specific,” said Germany Chancellor Angela Merkel. “It’s a success that industrialized countries as a group accepted this.”

John Kirton, who heads the G20 research group at the University of Toronto, said initial indications about what will be in the communiqué suggest the summit has been a success both for Mr. Harper and for the global economy.

"The communiqué of the G20 opens with a strong message that we need to put growth and jobs first, which is important for Canadians with an 8-plus-per cent unemployment rate and is consistent with the Prime Minister's strategy that we continue to stimulate and only start to exit fiscal policy next year, but it really is a big hand up to our friends in the United States, who are struggling badly on the growth and jobs fronts," he said.

"Some have described this as a stock-taking summit, and that may have been true six weeks ago. But we had a brand new global financial crisis blow-up starting in Europe, so the place is here, the time is now to stop that crisis and keep global growth going and to keep the financial reform agenda on track.''

Mr. Harper opened the second day of talks by saying the summit must strike the proper balance between sustaining economic growth and pulling back fiscal deficits.

“Here is the tightrope we must walk,” Mr. Harper said. “To sustain the recovery, it is imperative that we follow through on existing stimulus plans. At the same time, advanced countries must send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order.”

There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recovery. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth.

The communiqué lays out just how fragile policy makers believe the global turnaround remains, warning unemployment in many countries is at "unacceptable'' levels and the "social impact of the crisis'' is still being felt widely. It emphasizes the balancing act many leaders face as they try to bolster confidence and sustain private demand by trimming their debt.