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UPDATE 1-UK's Osborne claims victory on G20 deficit language

Published 06/05/2010, 06:44 AM
Updated 06/05/2010, 06:47 AM

(Adds quotes, context)

By David Milliken

BUSAN, South Korea, June 5 (Reuters) - Britain's new finance minister George Osborne claimed a first success on the international financial stage on Saturday after a shift in G20 language that he said backed his budget plans and bolstered other European countries seeking to cut deficits.

Finance ministers and central bank chiefs from the G20 group of developed and emerging economies met in the South Korean port of Busan on Friday and Saturday to plan coordinated economic policies and proposals for tougher financial regulation before a summit of G20 leaders in Toronto later this month.

The meeting was Osborne's first appearance at a global financial forum since he became finance minister after Britain's May 6 election, in which his Conservative Party came first after campaigning on a platform of faster action to cut Britain's record deficit.

In the wake of Greece's financial crisis, the new government pushed to speed up budget deficit cuts, starting in the current financial year, even as the economy is only just emerging from recession. Osborne said the post-meeting statement was a note of G20 approval for Britain's plans.

It did not name Britain specifically, but supported "recent announcements by some countries" about spending cuts to take effect in 2010 and stronger national monitoring bodies -- a probable reference to the Office of Budget Responsibility created by Osborne.

"I think we've achieved a significant success by getting the endorsement of the G20 for the fiscal position we adopted just three weeks ago," he told a news conference after the meeting.

Moreover, Osborne said G20 also offered backing to euro zone countries pushing through unpopular austerity programmes.

"From my conversations with other participants there's been a notable change of tone," he said. "The new British government has contributed to changing the tone at the G20 and making sure we're focused on these issues of countries with high deficits. The G20 communique will help some of the governments in the euro zone who face these challenges stick to their course." (Editing by Tomasz Janowski)

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