Mon, May 21, 2012 - Page 1 News List

G8 urges Greece to remain in eurozone, paper over divisions


US President Barack Obama, right, listens to German Chancellor Angela Merkel following the G8 summit in Camp David, Maryland, on Saturday.

Photo: Reuters / Bundesregierung / Guido Bergmann

G8 leaders expressed their wish to see Greece stay in the eurozone at a Camp David summit as the group papered over deep-seated divisions about how best to tackle the crisis in the economic bloc.

With the future of Europe’s currency union in doubt, leaders of the world’s largest economies called on Greece on Saturday to stick fast to the terms of a massive cash-for-reforms bailout, which is hanging by a thread.

“We agree on the importance of a strong and cohesive eurozone for global stability and recovery,” a final G8 joint communique stated. “We affirm our interest in Greece remaining in the eurozone while respecting its commitments.”

The summit took place after an electoral romp for Greek anti-austerity parties that called into question the country’s commitment to reforms and could leave G8 creditors facing a choice between loosening austerity demands or turning off the bailout spigot.

US President Barack Obama noted leaders’ agreement that growth and jobs must take precedence over austerity.

“As all of the leaders here today agree, growth and jobs must be our top priority,” Obama said at the conclusion of the meeting.

Critics say two years of single-minded focus on debt reduction have fueled rampant unemployment, brought Greece to the verge of bankruptcy and deepened crises in Italy and Spain.

Inevitably that brought tensions with German Chancellor Angela Merkel that were evident throughout the summit.

Her displeasure was evident on Friday when a casually dressed President Obama greeted G8 leaders at his cabin for an informal dinner which was designed to encourage candor.

It started well. Obama welcomed Merkel to the summit with a cordial: “How’ve you been?” However, when she responded — a shrug and pursed lips — Obama rushed to bridge the obvious gap: “Well, you have a few things on your mind,” he said.

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