CAMP DAVID, Md. (AP) — President Obama and other leaders of the Group of Eight industrial nations expressed hope Saturday that Greece will remain in the Eurozone, anxious to keep its economic troubles from spreading around the world. The leaders said all of the nations have an interest in the success of efforts to strengthen the eurozone and help Europe’s economy grow.
Obama said the leaders agreed that Europe’s financial crisis must be addressed with a mix of growth and austerity measures, as they huddled for a shirt-sleeve discussion that also covered world concerns about ups and downs in oil prices.
Germany’s Angela Merkel, for her part, said growth and deficit cutting reinforced each other “and that we have to work on both threads, and the participants have made that clear, and I think that is great progress.”
The G-8 leaders, in a joint statement from the rustic presidential retreat, reflected both hope and a recognition of the daunting economic challenges they face.
“The global recovery shows signs of promise, but significant headwinds persist,” they said.
The summit brought together leaders of the United States, Germany, France, Canada, Italy, Britain, Russia, and Japan in an effort to figure out how to tame Europe’s debt crisis while also increasing the demand for goods and spurring job growth.
Their statement conceded some points to Merkel’s push for austerity, saying budget deficits needed to be closed. But it added that budget cutting should “take into account countries’ evolving economic conditions and underpin confidence and economic recovery.” That suggested a willingness to let indebted countries take more time to reduce their deficits in line with eurozone rules in order to lessen the deadening impact of cuts on the economy.
“The right measures are not the same for each of us,” their statement said.
The leaders called for “investments in education and in modern infrastructure” which would involve more government spending. European leaders have talked about increasing funding for their development bank and making more use of unspent infrastructure funds. Those funds amount to significant sums in Greece and Portugal — 7 and 9 percent of GDP — but come with rules and condition that make them hard to tap in a hurry.
Obama chose the secluded Camp David setting in part to give leaders a chance for an intimate and freewheeling discussion out of sight of most media and far from the raucous protests that have accompanied previous meetings of the G-8. Obama and his counterparts emerged briefly at midday for a group photo, strolling down from the rustic presidential cabin straddling a golf green with a sand bunker.
“Everybody give them one wave,” Obama instructed the assembled leaders as they lined up for their official photo. “Let’s look happy.”
On the sidelines of the summit, Obama convened a lunch meeting of G-8 leaders and the leaders of Benin, Tanzania, Ghana and Ethiopia to discuss ways of improving food security in Africa. Obama said all of the G-8 leaders were committed to fulfilling the terms of a food security initiative developed in 2009 that led to $22 billion in government-backed pledges. “We’re looking to go beyond what we agreed to three years ago,” Obama said.
Obama’s argument for additional stimulus measures alongside belt-tightening was primarily aimed at Germany, the strongest member of the union that uses the common Euro currency.
Merkel, speaking about efforts to promote growth, said that “we have some investments for the future under consideration” in research and development, Internet networks and infrastructure. But she said “this doesn’t mean stimulus in the usual sense.” She added that “we are certainly open” to more use of the EU’s development bank and infrastructure funds for Greece, but that Greece must keep to the strict terms of its bailout loans.
The G-8 session sets the stage for a far more consequential European summit in Brussels next week where the countries that share the euro as their currency hope to come together on specific steps to fight rising debt while spurring a recovery.