The G20 has its hands full. At a meeting in Moscow earlier this month, the Group of 20 nations agreed that the global economy remained "too weak," requiring greater efforts to stimulate growth while trying to ensure that recovery will not be derailed by financial market volatilities.

The global economy was weakened mainly by financial market volatilities arising from the credit crisis in the United States. The ripple effect of this crisis triggered the outbreak of the sovereign debt crisis in Europe that pushed the global economy further into recession.

This situation gave a boost to the argument for austerity, which is favored by conservative economists who contend that fiscal discipline can bring calm to the financial markets and restore confidence in the private sector. With this renewed confidence, the private sector would invest again, bringing about an increase in economic activities and the creation of new jobs.