Obama backs Europe growth push

President Barack Obama threw his weight behind France's demand for pro-growth policies in Europe Friday, as world leaders gathered at Camp David for a G8 summit darkened by Greece's possible eurozone exit.

Forging an alliance that could help upend two years of austerity-focused policies championed by Germany, Obama and French President Francois Hollande at a White House meeting rallied around the need to kick-start growth.

Fearing Europe's roiling crisis could dent the US economy and with it his chances of re-election, Obama risked a confrontation with German Chancellor Angela Merkel, a G8 ally who has demanded austerity come first.

Obama stressed that events in Europe held "extraordinary" importance for the United States, which unlike the eurozone is growing, albeit slowly.

He said that the G8 summit, which he will convene at his Camp David retreat later Friday, would discuss "a responsible approach to fiscal consolidation that is coupled with a strong growth agenda."

Meanwhile, Hollande said growth must be the priority, maintaining his stance that austerity measures alone would be insufficient to reverse the crisis in Europe.

In an attempt to smooth over the split within the G8, other European leaders stressed that austerity and stimulus are not 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 with Greece's fiscal crisis apparently approaching denouement, those good words may be sorely tested.

The recent clobbering of Greek parties that back austerity measures under the country's 173-billion-euro ($220 billion) bailout has sparked a fresh round of market panic and left the two-year-old effort to prevent a Greek default on life support.

Fresh Greek polls are scheduled for June 17, but there is no certainty that supporters of the painful reforms will win, and already nervous Greeks have been pulling money from bank accounts.

If anti-austerity parties win, the markets are already betting that the rest of Europe turns off the bailout spigot, a decision that would force a Greek default and would likely spell an exit from the eurozone.

So far, European leaders are insisting that Greece must meet its commitments, a stance that will likely be held until the elections. But a row is brewing over whether Greece's bailout package needs to be revisited.

Two years of austerity have resulted in crippling unemployment and while Greeks say they are overwhelmingly in favor of staying in the eurozone, there is little appetite for more budget cuts.

Diplomats say new initiatives are unlikely to come from the summit, but Obama's intervention tips Europe's political calculus toward pro-growth policies before European officials gather in the coming weeks to thrash out concrete measures.

Commission president Barroso said there was growing consensus around the idea of investments funded by common European bonds -- a measure he said would satisfy the need for austerity and stimulus.

"We need to compliment the fiscal consolidation efforts for reforms with investment," he told AFP on the margins of the summit.

G8 leaders will hold their main discussions on Europe's fiscal plight Saturday at Camp David's rustic collection of cabins on the wooded Catoctin Mountain in Maryland, outside Washington.

On Friday night, discussions around the dinner table at Obama's Laurel Lodge will focus on Iran's nuclear challenge ahead of talks between global powers and the Islamic Republic in Baghdad later this month.

The leaders are also expected to address 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.

Diplomats said there would also be an agreement on how to help newly free Arab nations recover state assets moved abroad by members of previous regimes.

The G8 club of developed nations includes the United States, Britain, Canada, France, Germany, Italy, Japan and Russia.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • ‘Next leader must not be newbie’
    ‘Next leader must not be newbie’

    Vice President Jejomar Binay believes the next president of the Philippines must have vast experience and a long track record in governance and in dealing with crises. “I am very much convinced that the local government is the best training ground for those who want to run for national government positions,” he said. Binay said he is determined to run for president in 2016 on the strength of his competence and track record. …

  • Massacre suspect tests negative for poisoning
    Massacre suspect tests negative for poisoning

    A suspect in the Maguindanao massacre case who had been examined at the Philippine General Hospital (PGH) tested negative for poisoning, medical records released yesterday showed. However, the Quezon City court handling the multiple murder case resolved to isolate Police Officer 1 Pia Kamidon from the rest of the accused detained at Camp Bagong Diwa in Taguig for his safety. In a two-page order, Regional Trial Court Branch 221 assisting Judge Genie Gapas-Agbada ordered jail officials to …

  • ‘Homework first before Facebook’
    ‘Homework first before Facebook’

    President Aquino elicited laughter from students here as he reminded them to open books first before Facebook. “Finish your assignments first before making a raid in the Clash of Clans,” Aquino said, referring to a popular online game. In a speech during the turnover yesterday of two new three-story buildings at the Tarlac National High School, he said the government could only provide opportunities for learning but the rest of the work would be up to the students. The new school buildings …

  • Espina resignation confirmed; Noy looks for replacement
    Espina resignation confirmed; Noy looks for replacement

    President Aquino ended speculations yesterday and confirmed that Deputy Director General Leonardo Espina had indeed resigned as officer-in-charge of the Philippine National Police. As of this time, we are conducting various interviews and checks on the various candidates,” Aquino told reporters at the Tarlac National High School in Tarlac City. Aquino had kind words for Espina, saying that he stood by and defended the 44 slain police Special Action Force (SAF) commandos in the operation in …

  • Palace welcomes G7 concern over sea reclamation
    Palace welcomes G7 concern over sea reclamation

    President Aquino welcomed yesterday the Group of Seven industrialized countries’ expression of concern over rising tension in the West Philippine Sea and South China Sea, calling it a clear indication of the global scope of the problem ramped up by China’s massive reclamation activities in disputed waters. In Tarlac City where he led the turnover of new classrooms, Aquino told reporters that goodwill and not tension must prevail in the West Philippine Sea and South China Sea, where territorial …

  • DepEd, TESDA tie up for K to 12
    DepEd, TESDA tie up for K to 12

    The Department of Education (DepEd) has partnered with the Technical Education and Skills Development Authority (TESDA) in the first two years of implementation of the K to 12 program. “We will use TESDA centers as technical-vocational laboratories for senior high school,” DepEd Secretary Armin Luistro said during the inauguration of 30 new classrooms at the Tarlac National High School yesterday. The classrooms were constructed in partnership with the Philippine Amusement and Gaming Corp. …

  • SE Asia Stocks-Philippine falls on foreign selling; others flat to weaker

    BANGKOK, April 17 (Reuters) - Southeast Asian stock markets ended flat to weaker on Friday as Philippine stocks slid on selling led by foreign funds and Singapore shares extended losses with investors ... …

  • Philippine Airlines parent says back in black
    Philippine Airlines parent says back in black

    Philippine Airlines' parent firm said it had returned to profitability, the first time in three years either entity reported being in the black for an entire year. In a filing with the Philippine Stock Exchange Thursday, PAL Holdings reported an after-tax net profit of 129.74 million pesos ($2.93 million) in its fiscal year to December 31. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options