OTTAWA - G20 countries are being asked to sign on to an economic recovery plan that would require 20 years of austerity, cost-cutting and higher taxes, The Canadian Press has learned.

Not surprisingly, they're balking.

"It's tough medicine and it's not obvious the patients are keen on swallowing it," said one insider.

Sources say the International Monetary Fund has finally responded to a major request by the G20 and crafted a strategy that would put the world on a stable fiscal footing.

The Fund has recently given G20 governments two key papers: a "mutual assessment" that exposes the folly of countries going off in all directions without co-ordinating their recovery plans; and a "strategy" paper on fiscal consolidation that maps out how rich countries should rein in their ballooning debt.

Taken together, the two papers lay out a blueprint for putting the world economy on a stable path. They map out actions needed by the indebted advanced countries, emerging markets carrying large surpluses, and emerging markets with growing debt.

Agreement on the plan described in the papers is at the heart of G20 negotiations, and is the raison-d'etre of the summit in Toronto in five weeks.

"Is it daunting? Yes. But it's a hell of a lot better than the alternative," said a second source.

Details obtained by The Canadian Press reveal that the main goal is to rein in government debt around the world, pulling it back to the more sustainable levels seen before the 2008 financial crisis.

While G20 countries have already agreed that they need to take action on debt, sources say they are far less keen on agreeing on the remedy.

That's because the plan would require advanced G20 countries to turn their large deficits into significant surpluses by 2020, and carry those surpluses for a solid decade afterward.

In order to get there, the advanced countries — mainly the United States, the United Kingdom, Europe and Japan — would first have to let their stimulus packages run out. That's the easy part.

Then, they'd have to clamp down on runaway spending on health care, pensions and other age-related government programs. That type of spending should be kept as a stable proportion of a country's gross domestic product.

Advanced countries would also have to freeze per-capita government spending in other areas.

And they'd have to make up the rest of the revenue gap by raising taxes, especially value-added taxes on consumers, and so-called "sin" taxes on items such as alcohol and cigarettes.

"This is a little bit of group shock therapy at the moment," commented Don Drummond, outgoing chief economist at Toronto-Dominion Bank and a former senior Finance Department official.

The papers say that the job for the advanced countries needs to be done regardless, whether or not China and other parts of Asia pick up the slack in global growth and take action to allow exchange-rate flexibility and spur domestic demand.

But the deficit-reduction exercises would be far less painful for everyone involved if emerging markets co-operate and if China allows its currency to appreciate, according to the mutual assessment paper.

"Collective action would yield tangible and material benefit to the G20 membership and the global economy," it reads.

"Global growth would be stronger, more balanced, thus more sustainable. Employment gains would be significant across regions."

But if the advanced countries don't tackle their deficits meaningfully, and if Asia relies on exports to drive high growth, the problems that have undermined Greece's economy and prompted social disorder are only a sign of things to come, says analyst Thomas Bernes.

"It's an experiment in real time, with enormous consequences," said Bernes, the acting executive director of the Centre for International Governance Innovation in Waterloo, Ont.

"They've got to deal with this."

The worst-case scenario and the quickly approaching date of the Toronto summit are clearly on the mind of Prime Minister Stephen Harper. He has put fiscal consolidation at the top of the list of G20 goals. And as Europe buckles under the weight of the Greek sovereign debt crisis, his tone has become urgent.

"We can confront our fiscal challenge with clear and realistic plans for fiscal consolidation, or we can wait for markets to dictate the terms for us," Harper wrote this week in a letter to his G20 counterparts.

The austerity solution proposed for advanced countries may seem too harsh for many G20 negotiators, but Canada's experience in the late 1990s proves that it can work, Drummond said.

Back then, Ottawa imposed huge cuts in spending, raised taxes, and was able to shift from large deficits to a surplus position in the course of five years, he pointed out.

The debt burden shrank away because the surpluses were sustained for most of this decade. And now, while Canada is carrying a deficit again, the repairs needed to return to fiscal health are not nearly as harsh as elsewhere, Drummond said.

He's worried that the G20 countries won't have the political will to endorse the detailed recovery plans, and will simply settle for pretty words about principles at the Toronto summit.

And while Canada is in relatively decent fiscal shape, pretty words won't put the global economy on the track Canada needs to pick up growth in the future, Drummond added.

"I think it's absolutely critical that they sign off on it."