Excessive government debt is the global business community’s single biggest worry right now, exceeding any concern about insufficient fiscal stimulus.
That’s the urgent message that 43 of the world’s most influential chief executive officers delivered to G20 finance ministers and Prime Minister Stephen Harper this weekend. Most of the executives were hand-picked by their national governments to fly to Toronto on the eve of the leaders summit.
Reducing deficits is important not only because of the direct sovereign risk, but also because balanced government books are key to restoring confidence, which is important for economic growth, said Gordon Nixon, CEO of Royal Bank of Canada.
“Business leaders said, ‘You can’t keep doing this,’ ” said John Manley, head of the Canadian Council of Chief Executives.
Executives told politicians that the private sector is willing to step in and pick up much of the responsibility for future economic growth, but that it requires transparency and certainty from governments in order to do so.
“Stimulus is winding down and the private sector is going to have to come in and pick up the slack,” said Hartley Richardson, CEO of Winnipeg-based James Richardson & Sons Ltd. But it will be hard to do so without clear rules of the road, Mr. Richardson and other business leaders agreed.
The leaders urged G20 finance ministers to work more closely with the business community, and told them that the villainization of corporate leaders – particularly those in the financial sector – is hampering the ability to move forward. Sixteen of the G20 finance ministers met with the business leaders on Saturday.
The corporate push for certainty about the rules of the road came in response to messages that the Canadian and South Korean finance ministers delivered to executives on Friday evening.
