Fearing that Europe’s crisis could affect the US economy as well as his chances of being re-elected, Barack Obama risked a confrontation with German Chancellor Angela Merkel, a G8 ally who has demanded austerity come first.
President Obama highlighted that last events in Europe held “extraordinary” importance for the United States, which unlike the eurozone is growing, albeit slowly, says Yahoo! News.
Obama added that the G8 summit, which is to be held at his Camp David retreat later Friday, would discuss “a responsible approach to fiscal consolidation that is coupled with a strong growth agenda.”
To kick-off the summit Obama, welcomed leaders soon after dusk at the threshold of his wood cabin for an informal dinner that lasted more than two hours, reports Reuters.
The dressed-down atmosphere helped to relieve some tensions, which have been stoked by the belief that two-years of painful cuts demanded by Germany and others have undercut Greek growth and made recovery more difficult.
So, Barack Obama greeted Merkel at his Laurel Lodge saying cordially: “How’ve you been?” When her response came: a shrug and pursed lips, Obama added: “Well, you have a few things on your mind.”
Publicly, European leaders have attempted to smooth over the splits within the G8, insisting austerity and stimulus need not be mutually exclusive.
“We need to take action for growth while staying the course in terms of putting our public finances in order. Stability and growth go together, they are two sides of the same coin,” European Commission President Jose Manuel Barroso said ahead of the summit.
But bearing in mind Greece’s fiscal crisis apparently approaching denouement, those good words may be sorely tested. Two years of austerity caused crippling unemployment and while Greeks assure they are overwhelmingly in favour of staying in the eurozone, there is little appetite for more budget cuts.
However, the summit comes days before the next round of Iran talks which are scheduled to be held in Baghdad. The G8 leaders “affirmed the importance of having a uniform effort in approaching those Baghdad talks next week,” the U.S. official reported.
“Each of the leaders noted the urgency for Iran to take concrete steps to assure the international community of the peaceful purpose of its (nuclear) program,” the official added.
On the crackdown by Damascus, the official described broad agreement on “the need to move rapidly toward a plan for political transition within Syria” and revealed that while Medvedev did not outright support that call, he did not oppose it either.
Medvedev is standing in for newly elected Russian President Vladimir Putin at the Friday-Saturday G8 meeting, which also gathers leaders from the United States, Canada, Britain, France, Germany, Italy and Japan.
On Friday night, the global leaders will focus on Iran’s nuclear challenge ahead of talks between global powers and the Islamic Republic in Baghdad later this month.
The list of discussions also includes Syria’s crackdown on its anti-government uprising, fears that North Korea will launch a new nuclear test and Myanmar, after Obama eased US investment restrictions Thursday on the country formerly known as Burma.
In addition to this, the leaders will try to reach an agreement on how to help newly free Arab nations recover state assets moved abroad by members of previous regimes.
When the summit is over late on Saturday afternoon, President Obama will fly to his home town of Chicago where he will host a two-day NATO meeting at which the Afghanistan war will be the central topic.