G-20 leaders look to shake off lingering economic troubles

PITTSBURGH -- When world leaders gathered in April to coordinate action on the international economy, it was in shambles. Billions of dollars in government spending and financial bailouts later, it's on the road to recovery.

The challenge facing leaders gathering here today for the third summit in less than a year is to stay the course rather than declare victory and reverse it, U.S. officials and outside experts say.

"Pittsburgh is not intended to be a victory lap," says Michael Froman, deputy national security adviser for international economic affairs. "We may have come back from the brink, but I don't think people are at all complacent about where we are."

For that reason, the Group of 20 meeting of the world's major and emerging economies aims to take stock of the recovery that the last summit in London helped to create — while acknowledging that the world economy, environment and financial regulatory system have a ways to go.

"The last thing anyone wants is to move too quickly," says Steven Dunaway, adjunct senior fellow at the Council on Foreign Relations, a think tank.

The last summit produced a compromise between two sides: the USA, United Kingdom and Japan favored robust government stimulus to spur the world economy, while European nations favored less direct spending and tighter regulation of financial institutions. The G-20 agreed to spur growth, help banks lend and work toward ending risky speculation. It also expanded the International Monetary Fund's lending capacity so the organization could help stabilize economies in less-developed nations.

Now, the challenge is to keep those changes in place while beginning to discuss exit strategies, says Colin Bradford of the Brookings Institution, a liberal-leaning think tank. Obama's choice of Pittsburgh to host the summit, he says, will focus leaders on the continuing needs of displaced workers.

This time, the Obama administration is trying to lay groundwork for what the White House calls "balanced and sustained growth." The trick may be balance: One problem the London summit failed to address was the imbalance between countries that sell and lend, such as China, and those that buy and borrow, such as the United States.