G-8 leaders hope Greece remains in eurozone

By Jim Kuhnhenn

Associated Press

Published: Saturday, May 19 2012 12:00 a.m. MDT

President Barack Obama along with other world leaders wave during a photo opportunity at the G-8 Summit Saturday, May 19, 2012 at Camp David, Md.

Susan Walsh, Associated Press

CAMP DAVID, Md. — President Barack Obama and other leaders of the Group of Eight industrial nations expressed hope Saturday that Greece will remain in the eurozone as they huddled for a shirt-sleeves summit aimed at keeping Europe's economic troubles from multiplying and spreading around the world.

Circling up around a table in a rustic cabin at the presidential retreat, the leaders underlined the need to keep bringing deficits down through austerity measures but also agreed that targeted spending on things like education and public works projects is needed to solve Europe's financial crisis.

"All of us are absolutely committed to making sure that growth and stability and fiscal consolidation are part of an overall package," Obama said.

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' joint statement from the woods of Camp David reflected both hope and a recognition of the daunting economic challenges they face.

"The global recovery shows signs of promise, but significant headwinds persist," it 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.

Their statement of support for Greece remaining in the euro underlined the potential and unpredictable damage to the global financial system that could come from a Greece departure. It follows a week of increasing speculation that Greece might not be able to stay the course.

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 a 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."

The setting gave the leaders a chance for informal walks and private exchanges on the cabin's patios on a warm spring day. Newly elected French President Francois Hollande said there had been "great frankness" in the discussions, and that leaders weren't digging in their heels on their respective positions.

First lady Michelle Obama, meanwhile, treated the leaders' spouses to lunch at the White House and a tour of its historic state rooms.

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.

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