TORONTO (Bloomberg) - Group of 20 (G-20) leaders are poised to endorse targets to tackle deficits, while giving nations flexibility to carry out their stimulus plans, according to excerpts of a draft of the statement sent to reporters.

Advanced economies would aim to at least halve deficits by 2013 and stabilise their debt-to-output ratios by 2016, according to the draft. German Chancellor Angela Merkel said the language "will be part of the final document" produced as the G-20 meeting wraps up yesterday in Toronto.

"Honestly, this is more than I expected, because it is quite specific," Merkel told reporters. "It's a success that industrialised countries as a group accepted this."

The G-20 will also pledge to maintain existing stimulus plans and take "concerted actions" to sustain the recovery. Recent events highlight the need for countries to establish "properly phased" plans to rein in deficits. Emerging market economies pledged to take measures to strengthen social safety nets, increase infrastructure spending and enhance exchange rate flexibility.

The draft of the statement includes targets championed by Canadian Prime Minister Stephen Harper, who sought to bridge differences between the US and Europe by proposing minimum deficit and debt reduction goals.

The G-20 has to bridge a gap between leaders such as President Barack Obama who want to focus on growth and officials such as Merkel who favor budget cuts. The statement says the global recovery, which has been faster than expected, remains fragile and uneven.

Efforts to rein in deficits and sustain the recovery will be differentiated and tailored to national circumstances, according to the statement.

"Here is the tightrope we must walk," Harper told the G- 20 leaders in his opening remarks yesterday. "To sustain the recovery, it is imperative that we follow through on existing stimulus plans. At the same time, advanced countries must send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order."

Countries such as Brazil have opposed the specific deficit targets, saying it will be hard for some G-20 members to meet them without stifling economic growth.

"It is draconian, a little difficult, a little exaggerated," said Brazilian Finance Minister Guido Mantega. "Some countries would not be able to do it. It is clear that a cut is needed, but at what velocity? It can't be too fast."

Mantega cited Italy and Japan as nations that may not be able to meet those goals.

The agreement would effectively endorse the austerity plan set out by the UK, which has the highest deficit in the group, while acknowledging US concerns that countries shouldn't be required to start cutting public spending until their own recoveries are fully entrenched.

"The speed and timing" of fiscal consolidation "must be tailored to national circumstances, so we do not derail the recovery under way," Australian Deputy Prime Minister Wayne Swan told a business audience in Toronto on Saturday.

The G-20, which accounts for about 85 percent of the global economy, replaced the G-8 last year as the world's foremost international policy-co-ordinating forum. The larger group means developed and emerging economies are trying to find common ground amid differences in prosperity that vary from the US's $46,400 in GDP per capita to India's $3,100.

Yesterday, leaders emphasised areas of accord in their fiscal policies, with Obama saying he and UK Prime Minister David Cameron are "aiming at the same direction". French President Nicolas Sarkozy said he saw no "clash" between countries on the issue, and Harper called it a "balancing act."

"As recovery takes hold at different rates around the world and as domestic political pressures figure more prominently than the threat of a global meltdown, one can expect these declarations to become increasingly general," said Dan Price, who served as former President George W. Bush's G-20 negotiator.

European nations have led the charge on the deficits. Merkel said in an interview with ZDF television that she lobbied her counterparts at the G-8 meeting to pursue "solid" fiscal policies and defended her own plan to reduce Germany's budget deficit by about 10 billion euros ($12.4 billion).

US Treasuries are having their best year since 1995, returning five percent through to June 24, according to Bank of America Merrill Lynch index data, as investors seek alternatives to Europe, where Greece and Spain had their credit ratings downgraded.

"European countries just had a near-death experience over Greece," said Tony Fratto, a former Treasury and White House official under Bush. "Some are afraid of suffering the same fate."

US Treasury Secretary Timothy Geithner urged G-20 leaders to focus on growth. The world economy is still emerging from the "fires of the crisis" and "the scars of this crisis are still with us" he said in prepared remarks for a press conference.

"We're aiming at the same target, which is world growth and stability," Cameron told reporters as he met with Obama in Toronto on Saturday. "But it means those countries that have big deficit problems like ours" have to take "action in order to keep that level of confidence in the economy."

Obama agreed that rising debt is an issue.

"We have long-term deficits that have to be dealt with," Obama said. "There are going to be differentiated responses between the two countries because of our different positions, but we are aiming at the same direction."

Outside the security zone that surrounds the meeting forum, protests turned violent yesterday as thousands of demonstrators marched through central Toronto. Protesters set fire to cars; others threw rocks at the windows of First Canadian Place, headquarters of the Bank of Montreal, and spray-painted "Bomb the banks" on the building.

Toronto police have made 584 arrests, including 100 today, Constable Wendy Drummond said yesterday in a telephone interview.