The anti-G20 protesters broke window panes of shops and banks and set on fire a couple of police cars while clashing with riot police.
Amidst conflicting pulls and pressures on withdrawing from the global stimulus, leaders of the world's developed and emerging major economies today began a Summit to discuss burgeoning sovereign debts and the need for urgent financial reforms.
After a day of riots, rarely seen in Canada, by protesters opposing the $1 billion spent on the Summit, host prime minister Stephen Harper opened the deliberations urging the world leaders to agree to halve their deficits by 2013 and put debt-to-GDP ratio on a downward trend starting in 2016.
The anti-G20 protesters broke window panes of shops and banks and set on fire a couple of police cars while clashing with riot police.
Meeting against the backdrop of the sovereign debt crisis in European countries, Harper said such a cutting down on spending would instill confidence in markets and among taxpayers after Greece's budget woes spakred a crisis across Europe and forced policy makers there to pool nearly $1 trillion for a rescue fund.
Prime minister Manmohan Singh is leading a high-powered delegation to the Summit which includes Planning Commission deputy chairman Montek Singh Ahluwalia, National Security Adviser Shiv Shankar Menon, Finance Secretary Ashok Chawla and Foreign Secretary Nirupama Rao.
The theme of the Summit, the fourth of its kind in two years starting from Washington at the height of the financial crisis in 2008, is "Recovery: New Beginnings" and there is no no unanimity on when and how to withdraw the stimulus for global recovery that was agreed in London last year.
Countries like Britain, France and Germany want a quick end to the stimulus so that government deficit does not not shoot through the roof but countries like India and the USA are favouring a calibrated exit.
There is also no no unanimity on the proposal for a tax to fund bail out of bank, a move India is opposed to.
While Britain has already levied a tax, France and Germany are pushing for it.
The issue of reform of international financial institutions including the International Monetary Fund and organisations of governance like the United Nations,
especially the permanent membership of the UN Security Council.
Harper told a press conference yesterday that G20 is executing a balancing act on fiscal consolidation, a term for reducing government deficits and debts.
India favours a gradual calibrated exit from the stimulus so that recovery is not not affected. It also feels there could be a problem of double-dip recession if the stimulus is withdrawn. Deflation is a bigger threat than inflation, it feels.
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