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Are 8 Heads Better Than One At Fixing Europe’s Debt?

Filed by KOSU News in US News.
May 19, 2012

Camp David, in the Maryland hills outside Washington, is usually a place for the president and his family to get away from work, a wooded refuge with a swimming pool, tennis courts and a putting green.

This weekend, though, President Obama is bringing work with him to camp — along with the leaders from most of the countries with the world’s largest economies.

The group, known as the G-8, will meet in a rustic setting, but the agenda will be all business.

There’s nothing relaxing about the timing of this weekend’s summit. The Greek debt crisis shows no sign of abating. The political and economic turmoil in Greece threatens to infect other countries in the eurozone, and that in turn could spread to the United States, choking off the still-fragile recovery.

That presents a challenge for Obama and his fellow leaders, some of whom are new to the G-8.

‘Growth Must Be A Priority’

French President Francois Hollande was sworn in less than a week ago. Obama invited Hollade to the White House Friday for a pre-summit get-together.

“Obviously we have had a lot to talk about. Much of our discussion centered on the situation in the eurozone,” Obama said.

Hollande campaigned for the French presidency on an anti-austerity platform that said belt-tightening alone won’t solve Europe’s economic woes. He says governments also need to encourage faster growth. Speaking through an interpreter, Hollande said this is one area where he and Obama are on the same page.

“Growth must be a priority. At the same time, as we put in place some fiscal compacts to improve our finances,” he said, “and on growth, President Obama was able to acknowledge some shared views.”

Indeed, Obama has been making the same argument in this country, insisting that while long-term deficit reduction is important, cutting government spending too much, too quickly, could be counterproductive.

In Europe, that argument seems to be gaining strength. Even Germany, which has led the drive for austerity, recently agreed to boost its government wages.

Obama’s national security adviser, Tom Donilon, says he’s encouraged by the change in European tone.

“The United States welcomes the evolving discussion and debate in Europe about the imperative for jobs and growth,” he says.

But evolution is a slow process, and Europe’s recession-weary citizens don’t have a lot of patience. Heather Conley of the Center for Strategic and International Studies says it’s easy enough to talk about promoting growth. It’s a lot harder to actually do it.

“My driving concern is how do you bring about this growth right now? Because that’s when it’s needed: right now. In our parlance, shovel-ready projects,” she says.

No one is looking for big breakthroughs at this weekend’s G-8 summit. As host, Obama is expected to lead the discussion, and the U.S. will offer plenty of advice. But the administration is not promising any financial help to Europe. Conley says that’s not what’s needed.

“Europe has the ability to fix this problem and needs to bring some urgency to that task,” she says.

Beyond Europe

While problems in the eurozone will dominate the meeting, G-8 leaders are also discussing their approach to Iran, Syria and Afghanistan.

Friday, Hollande reiterated his campaign promise to pull French combat troops out of Afghanistan by the end of this year. Hollande says France will find other ways to help, but his timetable for troop withdrawal is much faster than Obama has been talking about.

“Even as we transition out of a combat phase in Afghanistan, it’s important that we sustain our commitment to helping Afghans build security and continue down the path of development,” Obama says.

Obama notes that Afghanistan’s future will be the main focus of a NATO meeting that follows the G-8 and begins Sunday in Chicago. [Copyright 2012 National Public Radio]

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