G8 leaders agree on global growth, fiscal responsibility
Camp David, US: Seeking a "strong and cohesive" Eurozone, that includes debt-ridden Greece, leaders of the powerful G-8 countries have agreed to put their fiscal houses in order and accord priority to growth and jobs by revitalising the global economy.
At the end of their two-day summit here, the leaders of the G-8 -- the exclusive group of top eight economic nations made up of the US, Japan, Britain, Germany, France, Italy, Canada and Russia -- agreed that growth and jobs must be their "top priority."
"There's now an emerging consensus that more must be done to promote growth and job creation right now in the context of these fiscal and structural reforms. That consensus for progress was strengthened here at Camp David," US President Barack Obama, also host of the summit, said.
"Today we agreed that we must take steps to boost confidence and to promote growth and demand while getting our fiscal houses in order. We agreed upon the importance of a strong and cohesive Eurozone, and affirmed our interest in Greece staying in the Eurozone while respecting its commitments," Obama told reporters.
He said: "Europe is our largest economic partner. Put simply, if a company is forced to cut back in Paris or Madrid, that might mean less business for manufacturers in Pittsburgh or Milwaukee. And that might mean a tougher time for families and communities that depend on that business."
"Even as we've confronted our own economic challenges over the past few years, we've collaborated closely with our European allies and partners as they've confronted theirs," Obama said.
The US President said he discussed with other leaders the ways for promoting growth and job creation while still carrying out reforms necessary to stabilise and strengthen their economies for the future.
Observing that Europe's situation is more complicated than that of the US, Obama said Europe has got a political and economic crisis facing Greece, slow growth and very high unemployment in several countries.
"And what's more, when they want to decide on a way to move forward, there are 17 countries in the Eurozone that need to come to an agreement. We recognise that and we respect that," he said.
The group dealt with an economically weakened, debt- laden Europe and faced the questions of whether massive deficit cuts trumpeted by German Chancellor Angela Merkel or economic stimulus will help the continent grow its way out of the current crisis. The language in the G-8 declaration yesterday appeared to focus as much on growth as austerity.
Hanging over the deliberations was the fate of Greece, which has been unable to form an elected government. Many analysts believe that Athens will be forced to exit the Eurozone shortly, dropping the euro currency and possibly further rattling economic confidence.
The direction the debate has taken recently should give confidence, Obama said, adding that Europe has taken significant steps to manage the crisis. Individual countries and the European Union as a whole have engaged in significant reforms that will increase the prospects of long-term growth, he said.
"Of course, we also recognised the painful sacrifices that the Greek people are making at this difficult time, and I know that my European colleagues will carry forward these discussions as they prepare for meetings next week," he said.
In their statement, the G-8 leaders said: "We welcome the ongoing discussion in Europe on how to generate growth, while maintaining a firm commitment to implement fiscal consolidation to be assessed on a structural basis."
Obama said the leaders here understand the stakes and are aware of the magnitude of the choices they have to make and the enormous political, economic and social costs if they don't.
In their Camp David declaration, the G-8 leaders said they were committed to taking all necessary steps to strengthen and reinvigorate their economies and combat financial stresses.
"We welcome the ongoing discussion in Europe on how to generate growth, while maintaining a firm commitment to implement fiscal consolidation to be assessed on a structural basis."
The leaders, the declaration noted, also agreed on the importance of a strong and cohesive Eurozone for global stability and recovery, and affirmed their interest in Greece remaining in the Eurozone while respecting its commitments.
"We all have an interest in the success of specific measures to strengthen the resilience of the Eurozone and growth in Europe. We support Euro Area Leaders' resolve to address the strains in the Eurozone in a credible and timely manner and in a manner that fosters confidence, stability and growth," the declaration said.
"To raise productivity and growth potential in our economies, we support structural reforms, and investments in education and in modern infrastructure, as appropriate," it said.
Investment initiatives can be financed using a range of mechanisms, including leveraging the private sector, it said.
"Sound financial measures, to which we are committed, should build stronger systems over time while not choking off near-term credit growth. We commit to promote investment to underpin demand, including support for small businesses and public-private partnerships," the declaration added.
Leaders attending the summit also addressed a number of issues, including energy security, climate change and the situation in Iran, Afghanistan and North Korea.
There was discussion of a broad release of national oil reserves to steady shaky energy markets when tough new sanctions on Iran's oil exports kick in.
President Obama also announced that they had formed a new alliance to focus on food security with African leaders and the private sector.