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Prime Minister Stephen Harper (Sean Kilpatrick)
Prime Minister Stephen Harper (Sean Kilpatrick)

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G20 reaction: Why Canada had a 'platform to gloat' Add to ...

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Markets shrug off G20 Markets largely shrugged off the G20 initiatives this morning as the final statement from the Toronto summit left investors with little "to get their teeth into," as Adam Cole, the global chief of foreign exchange strategy at RBC Dominion Securities, put it. European markets were up, but the major indexes by less than 1 per cent, while New York stock futures were also up slightly. The bottom line is that markets basically feel the agreements at the summit were encouraging but hardly groundbreaking.

How the world sees it From Canada's fiscal standing to the actions of police, here's what some media outlets had to say:

Financial Times: "What do you do if you are part of the Group of 20 and cannot agree on a coordinated global economic strategy? Agree to differ and set your best communiqué drafters to work.

"The first thing to do is to find areas on which everyone can agree. Growth is the answer. When have you heard a leader or a finance minister openly advocating policies for stagnation? But alongside justice and education, growth is one of those words everyone advocates, but is meaningless. Growth is not a policy, but an aspiration."

Wall Street Journal: "The G-20 summit has given host Canada a wonderful platform to gloat.

"To begin with, Canada came out of the summit with most of what it had asked for going in - a fact Prime Minister Stephen Harper wasn't shy about pointing out.

"Speaking at a post-summit press conference about steps the G-20 had outlined to stabilize global economies, Mr. Harper warned there was more work to be done, but that 'these are important steps and they were steps that Canada has been seeking.'

"Those included a pledge by advanced economies to halve deficits by 2013 and stabilize or reduce debt burdens by 2016- something Mr. Harper had urged in a letter to global leaders before the summit.

"Of course, Canada would be doing this well ahead of schedule - probably next year, Mr. Harper noted. That's because Canada's fiscal and banking situation are 'totally different' (i.e.: much better) than that of its industrialized peers, Mr. Harper said.

"Canadian leaders have lost no opportunity to tell its peers and the world that its banks escaped the financial crisis relatively unscathed, and its government finances are in much better shape than other wealthy countries', giving the country greater weight in international deliberations on financial regulation and debt handling.

New York Times: "An escalation of aggressive police tactics toward even apparently peaceful protests at the Group of 20 summit meeting led to calls for a review of security activities.

"After allowing a small group of people to burn police cars and smash windows unimpeded on Saturday afternoon, many of the 20,000 police officers deployed in Toronto changed tactics that evening and during the last day of the gathering."

Al Jazeera: "Critics noted the agreements were not binding and the summit statement was filled with caveats and exemptions, pushing many of the tougher decisions on to the next G20 summit in South Korea in November.

"… Observers said the degree of divergence in the countries' policies for dealing with the recovery showed that, now that the initial shock of recession had passed, national agendas were once more crowding out global co-operation."

Read our coverage of the G8 and G20 summits

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What they do and don't have to do It should go down as a summit that saw just about everyone walk away happy - several hundred protesters excluded - largely because of what they don't have to do. Prime Minister Stephen Harper got his way, by having 19 of the 20 agree to halve their deficits by 2013, but the gathering was otherwise notable for what didn't happen amid competing agendas. President Barack Obama doesn't have to give up stimulus measures, Europe doesn't have to give up austerity measures, Japan doesn't have to play by the new deficit rule book, because it can't anyway given its obese debt levels, and China didn't have to talk about the yuan. Indeed, as the difference between the draft and final summit statements showed, Chinese leader Hu Jintao was successful in keeping his name out of it.

BMO Nesbitt Burns economist Sal Guatieri called the result "nothing earth moving but worth noting." His take:

  • Individual countries can decide on the appropriateness of a bank, meaning it's like a go in Europe and possibly in the U.S. but not in Canada, Japan or China.
  • Banks should adopt new capital and liquidity standards by the end of 2012, though countries will be allowed to phase in the capital increases at different times.
  • Developed nations must strive to halve their budget deficits by 2013 and stabilize their debt-to-GDP ratios by 2016. This gives the U.S. government enough rope to continue priming its fiscal pump into next year.

Read

BIS warns on debts, rates The Bank for International Settlements, the global body based in Basel, warned today that governments and central banks must soon begin getting back to normal after the exceptional measures they took to fight the recession. The BIS said in its annual report that governments must cut their deficits and central banks not wait too much longer before hiking interest rates lest a delay lead to further trouble. "We cannot wait for the resumption of strong growth to begin the process of policy correction," general manager Jaime Caruana said at the BIS annual meeting. Read the story

AgBank to raise more than $20-billion Agricultural Bank of China Ltd. plans to raise up to $10.1-billion (U.S.) when it launches the Shangai part of its initial public offering. That would put the Chinese company on track for the biggest IPO ever, with up to $23.2-billion with a dual listing in Hong Kong, Dow Jones Newswires said today. It's the last of China's four largest banks to list publicly, and plans to sell up to 25.57 billion shares.

BP costs continue to mount BP PLC said today its costs of fighting the massive oil spill in the Gulf of Mexico have now reached $2.65-billion (U.S.). That doesn't include the $20-billion fund it agreed to set up for damages related to the spill, which began with an explosion on the Deepwater Horizon drilling rig in April. BP added that it has received some 80,000 claims and paid out $128-million for 41,000 of them.

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