The Group of 20 rich and developing economies tried to balance their contrasting priorities by pledging to halve budget deficits by 2013 without stunting growth, and to clamp down on risky bank behaviour without choking off lending.
They left room for countries to move at their own pace and adopt "differentiated and tailored" policies that match national economic or political priorities, a sharp reversal from the unity of the previous three crisis-era G20 summits.
"Our challenges are as diverse as our nations," said US President Barack Obama. "But together we represent some 85% of the global economy, and we have forged a coordinated response to the worst global economic crisis of our time."
The G20 allowed each country space to decide how to proceed with controversial provisions such as taxing banks to recoup bailout costs and implementing tougher bank capital rules.
It also steered clear of confrontation with China by making no specific mention of the yuan currency, even though Beijing has just allowed it to resume its rise against the dollar.
The G20, which includes emerging economic powers as well as the developed economies where the economic trouble started, united last year to throw trillions of dollars into the battle against recession.
But that unity has begun to fray as countries emerge from crisis at different speeds and with different policy needs. Emerging Asian economies such as China have come roaring back, while the US recovery remains tepid and Europe lags behind.
"The G20 is fragmented as it transitions out of its role as a crisis-fighting committee," said Tom Bernes, vice-president at the Centre for International Governance Innovation in Toronto.
"While G20 leaders agree on the need for stronger financial regulation, actual details continue to be vague and lacking a solid deadline [...] There is a huge unfinished agenda."
Obama acknowledged talk of G20 divisions but said the meetings showed these countries could come together and embrace shared interests. "We can bridge our differences," he said.
Europe claims victory
The Toronto meeting was billed as a final check-up before November's G20 summit in Seoul. That meeting is the deadline for leaders to agree policies on issues including bank capital rules, financial regulation and voting rights at the International Monetary Fund.
Since G20 leaders last met in Pittsburgh in September, Greece's debt troubles have shifted the focus toward damaged public finances. Britain and Germany have joined Greece, Spain, Italy and other smaller European countries in putting forward plans to reduce spending.
The United States has preached patience, cautioning that the sudden removal of economic supports could tank the economy. European leaders have countered that fixing finances will improve confidence, and that is essential for growth.
European officials took the G20's commitment to cut deficits as a clear sign that the rest of the world had come around to Europe's point of view.
"The EU came to Toronto with a clear agenda. The summit's result reflects widespread convergence around Europe's approach," European Union officials said in a statement.
Halving deficits looks easily achievable, considering that US President Barack Obama has already pledged to do so and Europe sees the target as a bare minimum.
Heavily indebted Japan appears to be the one major advanced economy that might struggle to hit the deficit mark. In the communiqué, the G20 acknowledged the "circumstances of Japan" and welcomed its plans to shore up finances.
Stabilising debt as a percentage of total output within six years may be harder. Obama's budget forecasts show the debt ratio rising at least through 2015, and most advanced Western economies face rising costs as their populations age.
(EurActiv with Reuters.)
