G20 agree budget deficit cuts in 3 years
Updated on 27 June 2010
Prime Minister David Cameron went to the G20 summit hoping for consensus on the economy - which he achieved. But as Channel 4 News Washington correspondent Sarah Smith says, he also may have sealed the US-UK friendship over a bottle of beer.
Leaders at the G20 summit are understood to be close to an agreement to cut national budget deficits within three years.
The agreement would only apply to countries with the highest budget deficits, such as the UK.
The group of 20 leading and emerging nations, meeting in Canada, are split over how best to steer the economy to recovery. US President Barack Obama and Indian Prime Minister Manmohan Singh have warned against cutting too quickly, at risk of a "double-dip."
But German Chancellor Angela Merkel told reporters today that the G20 was moving towards a deal to co-ordinate cuts by 2013.
The deal comes amid protests over the summit, with around 500 people arrested.
But so far both outside and inside the G20 summit, things appear to be going relatively smoothly - much to the relief of Prime Minister David Cameron, who may have feared getting his knuckles rapped by the global leaders on his strict cutting programme.
However, if a deal is signed on a global programme of cuts, it will be a major win for the new prime minister.
Channel 4 News's Washington correspondent Sarah Smith explains the significance of Prime Minister David Cameron and US President Barack Obama's first meeting
Whenever a US president and a British Prime Minister meet for the first time it is always an occasion that is very closely analyzed. Not only what they say but also the body language and the atmosphere are closely examined to give some clues of how the relationship will develop.
Of course they always say it’s a “special relationship”. The Americans know they always have to use those words when there is a Brit in the room. Even though they don’t really mean them anymore. Global circumstances have changed since Churchill and FDR formed their special bond.
But some transatlantic friendships are closer than others. Margaret Thatcher and Ronald Reagan shared genuine mutual admiration, even affection. Tony Blair was very proud of how he managed to be close to both Bill Clinton and George W Bush, even if his friendship with the latter didn’t ultimately enhance his standing with his own voters.
So how will Cameron get on with Obama?
At the G20 summit in Canada they have just had their first formal sit down meeting. And they look as though they really are getting on well. Cameron has been shown a great deal of respect by the US president who asked him to lead the G8 discussions on Afghanistan. And at Saturday night's working dinner for the G20, Obama singled out last week's UK budget as an example of the kind of actions needed to restore health to the world economy. Cameron can be rightly pleased about both of these things.
But I’m sure that being given a lift in the presidential helicopter – Marine One – was the most exciting part of his trip to Canada. It’s very hard not to be seduced by the glamour that surrounds the US president and that a British PM can never possibly aspire to. And if you’ve only just taken office how could you not be both awestruck by and envious of the president’s trappings of office.
The president and the PM have spoken on the phone several times since the British general election. And before the England-USA World Cup game they promised that the loser would buy the victor a beer. A one-all draw meant they were able to exchange bottles of beer when they sat down for their first bi-lateral meeting.
Obama brought a bottle of Goose Island 312 beer from his home town of Chicago, and Cameron brought Hobgoblin ale from the Wychwood brewery in his constituency. But this choreographed moment of unity was almost ruined by a disagreement over the correct temperature at which to serve the beer...
“In America we drink our beer cold,” Obama told Cameron, instructing him to put the Goose Island in the refrigerator before he drinks it, and insisting he was going to do the same with the craft brewed ale he’s been given.
“You can drink it cold,” Cameron told him – muttering “but you wont like it” afterwards.
Obama isn’t much of drinker anyway so it’s quite possible he has no intention of drinking the Hobgoblin either warm or cold. And it’s equally possible that Cameron intends to hold onto his Goose Island bottle as a precious souvenir.
