Talks Of Eurozone Debt At G8 Summit
The gathering brings together eight of the world’s richest economies and is followed by a larger meeting of 61 NATO members and other allies in Chicago, Obama’s hometown and favored pick because the meeting will help bolster the city’s economy.
Chiefs of state or heads of government from Britain, Canada, France, Germany, Italy, Japan, and Russia are expected to attend.
White House National Security Advisor Thomas Donilon said the G8 Summit is the largest single gathering of world leaders ever held at Camp David.
Some of the topics being discussed include energy and climate issues along with talks about the global oil markets and the possibility of tapping national petroleum reserves. Obama is also hoping to discuss the European debt crisis and the war in Afghanistan.
The Associated Press reports that Obama is planning to promote a “strong growth agenda.” During his first meeting with French President Francois Hollande on Friday, the two leaders said managing the European debt crisis is critical to global financial health.
Hollande is insisting on rethinking a European austerity treaty, and wants to go much further than the United States, which The Washington Post said is supporting “stimulus programs in combination of belt-tightening measures.”
The Washington Post continued that:
White House officials said Thursday that Obama, at Camp David, will share his vision of a comprehensive approach to containing the fallout from Greece’s ongoing financial meltdown, which gained urgency amid renewed fears this week that the country would pull out of the euro currency zone.
The situation in Europe could hurt America’s economic recovery and Obama’s reelection. German Chancellor Angela Merkel is pushing for stricter austerity measures, but Obama is expected to drive Merkel towards a pro-growth stimulus position.
Analysts told The Los Angeles Times that:
It would be a mistake to assume that Europeans have enough means to handle the crisis, should the problems of Greece spread to Italy and Spain. And they warn that a worsening of the Eurozone's troubles would inflict pain on the U.S. economy because American companies rely on European trade and investments.
"The likelihood [of a Greek exit from the Eurozone] is rising every day," said Barry Eichengreen, a UC Berkeley economics and political science professor.
He likened the situation to a car driving down an icy road as Europe shifts from austerity to a more balanced approach that supports growth.
"That wheel is spinning slowly," he said. "But the other wheel, the crisis, is spinning fast. And you know what happens to a car when two wheels spin at different speeds. It careens out of control.”
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