George Osborne minds the G20’s language

What’s the view of world leaders on propping up growth with short-term spending? It depends who you ask.

Here’s what Christine Lagarde said in her speech opening the IMF conference in Washington yesterday:

“If countries have solid measures to anchor savings in the medium and long term, they can do more in the short term to accommodate growth.”

But here’s what the communique of G20 finance ministers said:

“We are committed to supporting growth, implementing credible fiscal consolidation plans, and ensuring strong, sustainable balanced growth.”

What’s missing from the G20 statement is any reference to supporting near-term growth, something the IMF has repeatedly stressed in recent weeks.

This omission was drawn to the attention of the travelling pack of UK journalists here in Washington by George Osborne yesterday, who said:

“People might note that some of the language of the last couple of weeks about short-term and medium-term has disappeared there. We’re just on the straightforward argument that you have to have credible fiscal consolidation plans.”

This is interesting. The Chancellor normally affects to be perfectly comfortable with Ms Lagarde’s increasingly frequent calls for those nations with fiscal space to go slow on consolidation. But what Ms Osborne implied yesterday is that he managed to get that sort of language struck out of the G20 communique, and that he regards this as a victory. Which isn’t perhaps the behaviour of someone entirely relaxed with the IMF’s increasingly Keynesian prescriptions.

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