G-20 leaders facing worries about rising deficits

World leaders who addressed a severe economic crisis with an unprecedented show of strength last year are finding it harder to maintain their solidarity in the face of new challenges.

Despite US appeals to refrain from removing stimulus measures too quickly, country after country is rushing to slash spending and raise taxes to avoid suffering the same fate as Greece, which found itself on the brink of bankruptcy last month.

After maintaining remarkable unity at three previous summits, the leaders of the world's major economies will come to Canada facing a good deal of tension over the best approaches to take to make sure that the global economy continues to emerge from the worst recession in decades.

In addition to a split over stimulus spending versus deficit reduction, the leaders will also be facing differences over the best approach to take to overhauling regulation of the financial system to make sure that the banking meltdown that precipitated the global crisis in the fall of 2008 is not repeated. Many of those issues are unlikely to be resolved.
    
The discussions will start Friday among the Group of Eight, the world's wealthiest nations, plus Russia, at a lake resort north of Toronto. They will then expand into discussions among the G-20, which includes the wealthiest countries plus major emerging economies such as China, Brazil and India, on Saturday and Sunday in Toronto.
    
Senior White House officials said yesterday the G-8 talks would center on development issues, including support for maternal and child health care in poor nations. The officials said President Barack Obama and the other G-8 leaders would also focus on a range of foreign policy issues, such as escalating tensions between North and South Korea, Iran's nuclear program and the stalled Middle East peace process.
    
While the global economy is beginning to grow again, high unemployment and a European debt crisis this spring have served as reminders that the recovery remains fragile.
   
Seeing the crisis that enveloped Greece, other nations have grown concerned about their high debt levels and have been rushing to put into place deficit-reduction programmes.