G20 Leaders Pledge to Cut Deficits

World leaders meeting in Canada pledge to halve deficits by 2013 but acknowledge the fragility of the global recovery.
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Updated from 11:34 a.m. EDT

Updated to include final G20 statement from Sunday's meeting.

TORONTO (

TheStreet

) -- World leaders Sunday pledged to cut deficits in the most developed countries by 2013. However, they struck a careful balance in their statement by acknowledging that the global recovery remains fragile.

"Advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016," said the G20 statement.

Such deficit reduction had been championed Canadian Prime Minister Stephen Harper before the G20 gathering in Toronto, and found hearty support from other leaders such as German Chancellor Angela Merkel.

Most leaders at the meeting agreed that governments needed to reign in spending and raise taxes.

But U.S. President Obama had warned that cutting off fiscal too stimulus too early could derail the global economic recovery.

And the final G20 statement appeared to acknowledge Obama's concerns, saying "To sustain recovery, we need to follow through on delivering existing stimulus plans, while working to create the conditions for robust private demand."

The statement also noted the less-than-robust state of the global recovery."Serious challenges remain," it said. "While growth is returning, the recovery is uneven and fragile, unemployment in many countries remains at unacceptable levels, and the social impact of the crisis is still widely felt."

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Greece's debt crisis, which has reverberated through global financial markets and necessitated a strong, coordinated response from fellow eurozone nations and the IMF, has underscored the risks of too much government debt.

The G20 meeting Sunday followed Saturday discussions among Group of 8 leaders,

who reached agreement on foreign policy issues

, castigating Iran and North Korea.

This article was written by a staff member of TheStreet.com.