Leaders stress growth and keeping Greece in eurozone
By Brian Beary in Washington | Monday 21 May 2012
Boosting economic growth and the euro debt crisis topped the agenda of the G8 summit in Camp David, on 18-19 May. The leaders of the EU, the US, France, Germany, Italy, the United Kingdom, Canada, Russia and Japan adopted a declaration that stressed that “our imperative is to promote growth and jobs,” adding that “we affirm our interest in Greece remaining in the eurozone while respecting its commitments”. The election of Francois Hollande as French president has shifted the emphasis further away from austerity and more toward pro-growth stimuli. US President Barack Obama noted after the summit talks that “there’s now an emerging consensus that more must be done to promote growth and job creation right now”. In addition to the G8 group discussions, the US president held bilateral meetings with German Chancellor Angela Merkel and French President Hollande.
That shift in focus had been clearly signalled by the White House in advance of the G8 by Obama’s top advisor on international economic affairs, Michael Froman. The G8 leaders would not have a “sterile” discussion on austerity-versus-growth as “everyone is focused on growth now,” Froman said, speaking at the Brookings Institute. The key question for Froman was “how do you stimulate growth without deepening deficits”? However, Senior Fellow on Foreign Policy at Brookings Justin Vaisse asserted that “there is a very superficial consensus” among the G8 leaders in the growth versus fiscal consolidation debate. Vaisse argued that given Obama’s pro-growth orientation, Merkel risked being isolated if she continued stressing debt reduction. But following the G8 meetings, a White House spokesman insisted that Merkel “was certainly open to discussing a growth pact that President Hollande has called for” and “was open to discussing some form of stimulus around Greece”.
HOLLANDE AND IRAN
In the talks on global security, the G8 leaders focused on Syria, Iran, Myanmar and democracy in the Arab world following the 2011 Arab spring. Iran was especially prominent given the upcoming international talks on Tehran’s nuclear plans, on 23 May in Baghdad, which EU High Representative Catherine Ashton is leading. The big question swirling around Washington is whether President Hollande will be as tough with Iran as his predecessor, Nicolas Sarkozy. Hollande, after meeting Obama, said at a joint press conference that “we share views” on Iran. The EU and US have been closely aligned on Iran since 2007 when ex-President Sarkozy’s arrival on the scene toughened Europe’s position.
The EU was represented by Commission President José Manuel Barroso and Council President Herman Van Rompuy, with both attending the G8 summit and the NATO summit in Chicago, on 20-21 May. A notable absentee from the G8 was Russian President Vladimir Putin, who was represented by Prime Minister Dmitry Medvedev. Asked about the Putin snub, the White House’s Froman stressed that the US had good contacts with Putin and Medvedev and that it was vital to continue the “reset button” policy of warmer relations with Russia that the US began in 2009. In terms of promoting trade, investment and democracy in the wider Middle East, Froman noted that the future of the region was less clear than Eastern Europe’s future was after the 1989 revolutions because “there is no EU star pulling them in one direction”.
Turning to Afghanistan, which tops the agenda at the NATO summit but was also discussed at Camp David, once again President Hollande came under the spotlight as his NATO partners are keen that he should not order a hasty exit of French troops from the war-torn country. While insisting that “our combat troops will be withdrawn by the end of 2012,” Hollande added that “we will continue to support Afghanistan in a different way”. NATO is progressively handing over responsibility for maintaining the security of Afghanistan to the Afghan government, with 2014 the deadline for the completion of that transition. Both Pakistan’s President Asif Ali Zardari and Afghan President Hamid Karzai were attending the NATO summit.