G20 nations agree to halve deficits by 2013

The world's richest nations, meeting at the G20 summit in Toronto, have agreed to halve their national budget deficits by 2013. The target is not binding and all major G20 nations had already implemented austerity measures aimed at reducing deficits to this extent.

But the announcement was deemed necessary in order to assure the markets that countries were taking fiscal prudence seriously.

And the G20 needed to justify a summit that history may mark down as one of the most pointless ever. Leaders failed to agree to collective action on banking levies; individual countries may or may not now implement them in the future.

All countries also agreed on the importance of banks building up greater capital reserves to prevent a repeat of the 2008 financial crisis.
However, the timeframe is leisurely at best: 2012 should mark a starting point for building up higher levels of liquidity - not the end of the process. ·