Camp David, Maryland
President Obama welcomed G8 leaders to Camp David for the G8 Summit this week-end and the focus of the meeting quickly turned to slowing growth in China and renewed concerns about an economic crisis in the eurozone.
G-8 leaders issued a joint statement calling for a combination of painful austerity cutbacks and growth promoting measures to help contain an economic crisis that threatens the global economy.
“We all have an interest in the success of specific measures to strengthen the resilience of the eurozone and growth in Europe,” they said.
“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.”
However, practical steps to be taken are still left up to the individual countries. They offered no specific concrete steps for debt-ridden Greece which will hold another round of elections on June 17.
President Obama provided some statements regarding the importance of structural reform in Europe.
“The direction the debate has taken recently should given us confidence. Europe has taken significant steps to manage the crisis” Obama said.
“Individual countries and the European Union as a whole have engaged in significant reforms that will increase the prospect of long term growth. There is now an emerging consensus that more must be done to promote job growth and job creation right now in the context of these fiscal and structural reforms” Obama emphasized.
German Prime Minister Angela Merkel spoke about growth and austerity being two sides of the same coin. She also made it clear that the 17 euro countries in the eurozone can’t spend their way out of the debt crisis.
Merkel didn’t show any signs of changing her tough austerity stance although she and France’s PM Francois Hollande both said they want Greece to remain in the eurozone.
France’s newly elected PM Francois Hollande told reporters that he will propose euro bonds when EU leaders meet again to discuss growth measures in Brussels on May 23.
Merkel has rejected the proposal for euro bonds and is showing no signs of revising her position.
Jonathan Slone of CLSE-Asia Pacific Markets told Bloomberg’s Susan Li on Sunday that Germany reported even before the G8 Summit that they want to see Greece stay in the eurozone.
Slone seemed concerned about the lack of major announcements during the G8 Summit.
“They are out of the G8 Summit with no major announcement” Slone said.
“I think that is bad news. No news right now is bad news” he explained.
Slone spoke about the need for better EU solutions for handling the economic problems in Greece that have sent the euro to a 4 month low against the dollar and many investors frightened about the prospect of Greece exiting the eurozone.
“They have to come up with a solution to the problem. The problem is only getting worse and there’s no such thing as containing contagion” Sloan said.
EU finance ministers will conduct a meeting later today.
On June 28th and 29th EU policy makers will hold another EU Summit in Brussels.