Source: The Canadian Press

Beware the Double Dip. That’s the key message in a new letter from U.S. President Barack Obama to his G20 colleagues, and the underlying thought in a soon-to-be released essay by Prime Minister Stephen Harper, obtained by The Canadian Press.

Both leaders implore the G20 members coming next week to a summit in Toronto to “safeguard” the fragile economic recovery, and avoid sending the world back into a recessionary tailspin.

But while they share the same pre-occupation, they differ subtly in where they see the biggest risks for recovery.

Obama emphasizes the need to keep stimulus measures in place for as long as necessary, to get people back to work.

“Our highest priority in Toronto must be to safeguard and strengthen the recovery,” Obama says in his letter, dated June 16 but released publicly on Friday morning.

“This means that we should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong.”

In other words, Obama does not want other countries to cut their stimulus packages before the giant U.S. economy has a solid chance to regain its momentum. And if necessary, more stimulus should be at the ready.

“In fact, should confidence in the strength of our recoveries diminish, we should be prepared to respond again as quickly and as forcefully as needed to avert a slowdown in economic activity,” he writes.

Harper, on the other hand, stresses the need for deficit-prone countries to put together solid plans to reduce debt burdens.

“We believe it is important to stay the course for now, but with an important caveat,” he writes in the introduction to a University of Toronto publication on the G20 summit, to be posted later today.

“Recent events are highlighting the real risks to highly indebted countries that lack exit strategies from large budgetary deficits,” Harper warns, referring to the sovereign debt crisis in Greece that prompted an unprecedented trillion-dollar rescue plan last month.

The leaders meet at the G8 summit next week in Huntsville, and then at the G20 summit right afterwards in Toronto.

The different emphases reflect the different economic circumstances of the two countries. Canada is recovering from the recession quite well, and the federal government has had the wherewithal to put in place a deficit-reduction plan that starts next year.

But the recovery in the United States has come in fits and starts. In his letter, Obama stresses that it won’t last unless the rest of the world does its part, and boosts demand.

In particular, he says that means countries with large surpluses – read, China – need to encourage their people to spend more, and also need to allow their exchange rates to be more flexible.

Both leaders urge the G20 countries to commit to medium-term plans to reduce debt. They also both want an agreement to move ahead quickly on financial regulations and measures to strengthen bank balance sheets.

Harper’s essay is meant to highlight his hopes for both the G8 and G20 summits. But he exposes his personal comfort with matters economic and financial, by focusing mainly on what the G20 should do to bolster the world recovery.

According to Harper, the G20 should be the world’s decision-maker for economic affairs, but the G8 is still a vital force for peace, security and development, since those issues require like-minded countries to work together.

The G8 summit, which starts a week from today, should also discuss climate change, Harper says. However, he only devotes one sentence to the topic, and does not mention it at all in a G20 context.

“Climate change disproportionately threatens the peoples least capable of adapting to it,” he writes, omitting all reference to the pressure from other countries to use the twin summits to push for more action on international climate-change agreements.

In drafts of the G8 communique, the climate change sections were left blank, signalling that agreement among the countries on where to take the discussion was elusive.

For Harper, the overriding theme of both summits is accountability. He wants countries to live up to economic and aid promises made in the past, and show clearly how they plan to meet new commitments.