Days before the G20 meeting, ECB chief Trichet explicitly rejected Keynesian demand-deficiency arguments, citing the need for “a budget policy … that we would call confidence building” that centered upon the reduction of debt. Two days later, the German finance minister Wolfgang Schäuble published an extended piece in the Financial Times in which he stressed the need for “expansionary fiscal consolidation.” Invoking the specter of future inflation, he declared that “we [Germany] … are … more preoccupied with the implications of excessive deficits and the dangers of high inflation.” As such, Germany would not respond to the crisis by “piling up public debt.” By the time of the Toronto meeting, the Canadians and the British had sided with the Germans, leaving the Americans isolated. The final communiqué of the Toronto meeting repeated the meme, authored by Trichet and amplified by Schäuble, of “growth friendly fiscal consolidation.” Seen at the time as a fudge between the Keynesian and orthodox positions, what it actually signaled was the end of global Keynesianism.

Mark Blyth, Austerity, loc. 173