- The Washington Times - Thursday, November 3, 2011

CANNES, France — President Obama was greeted at the G-20 summit in this seaside resort Thursday with a plea by French President Nicolas Sarkozy to get more involved in resolving Europe’s spiraling debt crisis.

“We need the leadership of Barack Obama,” Mr. Sarkozy said after the two leaders huddled to start the meeting of the world’s industrialized and large, developing nations. “We need the solidarity and support of the United States of America.”

Mr. Sarkozy met with Mr. Obama within an hour of his arrival at the summit, which is threatening to be consumed with the unraveling of a bailout for Greece.

Mr. Obama steadfastly has maintained that the European Union has the resources to resolve the debt burdens of Greece and other nations without outside help. But EU officials seeking the cash to boost their bailout fund to $1.4 trillion are asking for investments from China, Japan and other sources.

At his joint appearance with Mr. Sarkozy, Mr. Obama said the EU “has made some important steps toward a comprehensive solution.”

“We spent most of our conversation focused on strengthening the global economic recovery so we’re creating jobs for our people and stabilizing the financial markets around the world,” Mr. Obama said. “The most important aspect of our task over the next two days is to resolve the financial crisis here in Europe.”

Prior to the summit, Mr. Sarkozy and German Chancellor Angela Merkel met with Greek Prime Minister George Papandreou and convinced him to abandon his call for a referendum in Greece on the bailout, sending relieved markets on both sides of the Atlantic up for the day.

Mr. Sarkozy and Mrs. Merkel said Greece will not be allowed to remain as part of the eurozone if it does not comply with the bailout deal reached a week ago in Brussels.

That plan provides Greece with a second International Monetary Fund bailout and requires bondholders to accept a 50 percent writedown on the value of Greek debt.

And while Mr. Obama pledged his support to find a solution, White House aides made clear the U.S. is not contemplating an infusion of American cash for the bailout.

After leaving Mr. Sarkozy, Mr. Obama met with Mrs. Merkel separately and praised her leadership in the debt crisis.

“Central to our discussions at the G-20 is how we achieve better global work and put people back to work. That means we’re gonna have to resolve the situation here in Europe,” Mr. Obama said. “And without Angela’s leadership, we wouldn’t already have made the progress that we’ve seen.”

Obama administration officials and other G-20 nations have been pushing China, whose currency is artificially low, to do more to help the global economy.

G-20 leaders are working on a draft communique that urges its members to move more rapidly toward greater exchange-rate flexibility - language that generally is aimed at China’s undervalued currency.

Treasury Secretary Timothy F. Geithner raised the issue Thursday in a meeting with Chinese Vice Premier Huang Ju.

“It’s very much been part of the discussions here,” said Lael Brainard, a U.S. Treasury official who described China’s movement on the matter as “a constructive shift.”

Mr. Obama also briefly addressed the growing nuclear threat from Iran, saying he and Mr. Sarkozy agreed “on the need to maintain the unprecedented international pressure on Iran to meet its obligations.”

An international nuclear monitoring body is expected to release a report next week citing Iranian progress in developing nuclear weapons. The U.S. is working behind the scenes with Russia and China to take more punitive action against Iran in the U.N. Security Council.

The two-day summit in this wealthy, glitzy resort city comes as protests in the United States and around the world target the growing imbalance between the wealthy and the poor.

Protesters at the G-20 are being kept miles away from the center of Cannes, where the meetings are being held. Mr. Obama’s motorcade did not pass any protesters on its 30-minute drive to Cannes from the airport in Nice.

On another agenda item for the conference, Mr. Sarkozy said he and Mr. Obama had reached “common ground, or at least a common analysis,” on a financial transaction tax, which would set minimum tax rates for financial transactions in the 27-nation EU beginning in 2014. The British have been adamantly opposed to the tax.

Mrs. Merkel, especially, has been pushing for the tax, which would raise about $79 billion per year, to make financial institutions pay for contributing to the economic crisis. The German chancellor has been critical of Mr. Obama for failing to be more punitive against the financial sector. Mr. Obama has proposed a “responsibility fee” on banks with more than $50 billion in assets.

But Michael Froman, White House deputy national security adviser for international economic affairs, downplayed the suggestion that the leaders had broken new ground.

“The president made clear he shares the objectives that Chancellor Merkel and President Sarkozy have in ensuring that the financial sector contributes an appropriate share to the resolution of the crisis,” he said. “There is broad consensus about the ability of each to pursue this in their own way.”

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