Abu Dhabi, June 27th, 2010 (WAM) -- Presidents and prime ministers of the G8 and G20 are meeting now in Toronto to focus the world's leading nations on keeping the wobbly global economy focused on recovery. When they all met last year, the global financial and banking crisis was at the very heart of the discussion, making it the most relevant such gathering in decades, commented a UAE daily.
"Billions of dollars of intervention, stimulus packages and incentives managed to turn the tide of the recession. But the danger now is that huge debt and deficit levels will turn the recession from U to W shaped. The spectre of sovereign default is real, with Greece suffering the ignominy of European Central Bank and International Monetary Fund intervention", said "Gulf News" in its today's editorial. The euro, once touted as a global currency to replace the US dollar, is now trading at its lowest level, with the economies of Spain, Portugal and Ireland also in trouble as unemployment soars, property prices plummet and public spending is uncurtailed, it added. "The US deficit is at unprecedented levels while Britain this week introduced a tax-increasing budget which is attempting to curb the UK's runaway debt", the paper noted. "It is against this backdrop that the leaders meet, faced with the daunting task of trying to mop up unprecedented levels of red ink on government balance sheets, with 10 of the G20 members amassing government debt levels equal to at least half of the economic output. Perhaps more worrying is that these are developed countries with aging populations and slow rates of economic growth". In essence, there is little room to avoid having millions of ordinary citizens pick up the burden of higher taxes and lower government services for years to come. "Tough times call for tough measures: the only issue is how to turn off government spending. But there is no other way out of this mess", it concluded.Copyright Emirates News Agency (WAM) 2010.
