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G-20 leaders vow to cut deficits, boost growth

As the G-20 summit ended Sunday, world leaders pledged to cut deficits and boost growth, but failed to agree on a worldwide financial transaction tax. Meanwhile, anti G-20 protests continued in the streets of Toronto.

Britain's Prime Minister David Cameron, center right, Germany's Chancellor Angela Merkel, center, and Spain's Prime Minister Jose Luis Rodriquez Zapatero, left

World leaders said they would adopt "differentiated and tailored" economies

World leaders at the Group of 20 summit on Sunday pledged to cut their national deficits in half by 2013 and agreed to let members set levies on their banks, but rejected calls for a worldwide tax on financial transactions.

On the second day of the two-day summit in Toronto, the leaders of the world's most powerful economies said their countries would have to move at their own pace and adopt "differentiated and tailored" economies to suit their contrasting priorities without stunting growth.

“Frankly, the outcome was better than I expected,” said German Chancellor Angela Merkel. She said leaders had come up with a formula for debt reduction that would not harm growth, a plan that “corresponds exactly to our timeline.”

"Our challenges are as diverse as our nations," said US President Barack Obama. "But together we represent some 85 percent of the global economy, and we have forged a coordinated response to the worst global economic crisis of our time."

"There are a range of policy approaches to this end. Some countries are pursuing a financial levy. Other countries are pursuing different approaches," leaders said in the summit's final report, which took negotiators at least 45 hours to draft.

Transaction tax rejected

However, the report was also seen as a blow to European ambitions as it made no reference to a financial transaction tax, a proposal rejected by a "vast majority" of G-20 leaders "at once," according to diplomatic sources.

Prime Minister David Cameron, right, and Chancellor Angela Merkel watch the World Cup

Cameron, right, Merkel took time out to watch the World Cup

Merkel, who along with the leaders of Britain and France had pushed hard for worldwide support of the tax, admitted that the outcome was less than she had hoped for. Britain, France and Germany are all expected to introduce their own bank levies later this year, and the US is also planning a similar move.

Merkel had reason to be more upbeat earlier in the day, as she took time out from the conference to watch the second half of the Germany-England match with British Prime Minister David Cameron, which Germany won 4-1.

"I am still all excited," she told reporters. "I can only say to the German team, go on like this - it was great. Today everything went perfectly in the heads and in the legs."

Clashes continue

As world leaders talked and watched the World Cup in the convention center, anti G-20 demonstrators continued to protest in numerous locations outside the tightly controlled security perimeter.

A protester with gas mask and camera participates in a stand off with a line of riot police

Protests continued on Sunday

At least 600 protesters had been arrested by late afternoon, as standoffs saw police in full riot gear firing tear gas for the second straight day.

"Police are continuing to arrest people who engage in criminal activity," said police spokeswoman Jenn Geary. "If they breach security they're going to be arrested."

Police adopted a more aggressive strategy Sunday by going into the crowd to make arrests, compared to Saturday when they stood back as protesters torched four police cars and vandalized stores and banks.

A heavy downpour and severe thunderstorm warning discouraged some protesters, though clashes continued into the evening. Despite the reported violence, Toronto police said no serious injuries were reported among police, protesters and bystanders.

Author: Martin Kuebler (AFP/dpa/Reuters)
Editor: Nigel Tandy

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