20100626
reuters

World leaders cast about for a common approach on Saturday to securing an uneven economic recovery that is showing signs of fading.

The Group of Eight industrialized nations were meeting for a second day at a resort north of Toronto, followed by a summit here of the larger G20 club of rich and emerging nations.

As the official agenda shifted toward economic and political issues from aid and development, wedge issues such as shrinking government debt piles, regulating banks, and the value of China's yuan currency moved to the fore.

A global recession has given away to a three-speed recovery, with Asia's growth roaring ahead while the U.S. recovery plods along and Europe lags behind.

As a result, G20 unity is fracturing, with leaders disagreeing over how best to safeguard recovery. Unemployment remains high in most advanced economies, and growth has slowed since late last year.

"Quite honestly, I think the world economy is faced with a number of uncertainties," India's Prime Minister Manmohan Singh told the Toronto Star. "As it was gradually getting out of the deep depression or deep recession, we've had the euro zone crisis and the sovereign debt crisis."

In Europe, where Greece's debt troubles have trained attention on unsustainable public spending, the emphasis is on budget cuts to restore confidence. The United States wants the rest of the world to bolster domestic demand and not rely on Americans as consumers of last resort.

Europe's policy response will be "a major determinant of which way the world economy evolves," Singh said.