The world’s richest economies, saddled with huge debts after spending their way out of the credit crisis, papered over differences on Friday over how to clean up their finances with minimal damage to growth.
Leaders from the G8 met in Canada before a broader summit with China and other rising economic powers of the G20, now the world’s dominant economic policy forum.
Washington appeared to be at loggerheads with Berlin as US officials expressed concerns that a nascent recovery from the recession could be derailed by accelerating austerity in much of Western Europe.
German Chancellor Angela Merkel, however, said that the G8 talks had not produced any conflict over economic policy.
“The discussion was not controversial, but was based on great mutual understanding,” she said.
According to off-the-record briefings by European officials, US President Barack Obama told his counterparts he was worried that excessively deep and fast cuts in Europe could eat into growth, but he did not question the need for them.
British Prime Minister David Cameron, whose government unveiled an austere budget this week, said smoothing imbalances between export-rich countries and debt-laden consumer nations would require belt-tightening by the US too.
“Part of dealing with the imbalances is for the worst deficit countries to roll up their sleeves, get on with the job and make sure they are living within their means,” he said.
Should the G20 need a moment of levity, it has the soccer World Cup in South Africa.
Asked if he and Merkel would watch England play Germany on Sunday, Britain’s Cameron said: “There is an idea we might try and watch it together. I will try not to wrestle her to the ground during penalties, but we will have to see.”
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