
CAMP DAVID, Md. — Leaders of the world’s richest countries banded together on Saturday to press Germany to back more pro-growth policies to halt the deepening debt crisis in Europe, as President Obama for the first time gained widespread support for his argument that Europe, and the United States by extension, cannot afford Chancellor Angela Merkel’s one-size-fits-all approach emphasizing austerity.
Pointedly recognizing “that the right measures are not the same for each of us,” the leaders of the Group of 8 nations, at a meeting hosted by Mr. Obama at Camp David, committed to “take all necessary steps” to strengthen their economies. They said they wanted to keep Greece in the euro zone and vowed to work to promote growth in Europe, though behind the scenes distinct differences remained over what kinds of stimulus policies to pursue.
“Our imperative,” the leaders said in their statement, “is to promote growth and jobs.”
It is by no means the final word in the growth-versus-austerity fight that has been under way for two years. Even with the future of the European currency union in doubt, Germany has insisted that Europe’s ailing economies tackle their financial problems through spending cuts, a policy that critics say has caused higher unemployment, brought Greece to the edge of bankruptcy and worsened the crises in Spain and Italy.
The leaders did concede somewhat to Ms. Merkel’s position on austerity, acknowledging that national budget deficits had to be addressed. But they added that spending cuts must “take into account countries’ evolving economic conditions and underpin confidence and economy recovery,” a recognition of how much the austerity packages have dampened consumer and political confidence in Europe.
Also, in a warning to Iran, the leaders pledged to take steps to guarantee continued oil supplies after an oil embargo against Iran begins on July 1.While Greece is not part of the Group of 8 — the club is made up of the United States, France, Germany, Britain, Italy, Canada, Japan and Russia — the political and economic crisis facing Athens hovered over the meeting. Greece has been unable to form a government after voters, angry over austerity measures, brought down the last government, and there is now talk of bringing back the drachma and abandoning the euro.
Ms. Merkel and Mr. Obama met privately after the meeting ended. In her public remarks, the German chancellor said that growth and deficit-cutting reinforced each other, and that “we have to work on both paths, and the participants have made that clear, and I think that is great progress.”
With his own re-election bid tied to a fragile American economic recovery that could easily reverse if Europe’s economy takes another turn for the worse, Mr. Obama was pushing hard on Saturday for a euro-zone growth package. American officials said they hoped that after the full-court press this weekend at Camp David, Ms. Merkel would be more amenable to the pro-growth argument when she meets with European leaders this week at a summit to come up with specific steps to fight rising debt while spurring the economy.
The last time world leaders met to discuss the European debt crisis, in Cannes last November, the French president at the time, Nicolas Sarkozy, joined with Ms. Merkel to push Italy to stick to an austerity package. But the tone was different this time. Mr. Sarkozy lost his re-election bid to François Hollande, who came into office last week promising to focus on growth. And even before they showed up at Camp David to gang up on Ms. Merkel, Mr. Hollande and Mr. Obama had forged a new alliance at a prearranged meeting at the White House to focus on growth.
In comments to reporters afterward, Mr. Obama said that the group needed to discuss “a responsible approach to fiscal consolidation that is coupled with a strong growth agenda.”
“If a company is forced to cut back in Paris or Madrid, that might mean less business for workers in Pittsburgh or Milwaukee,” Mr. Obama said to explain why the European crisis matters to the United States. He said that while Europe’s predicament is “more complicated” since it requires coordination among multiple governments, steps his own government took to blunt the impact of the American financial crisis in 2008 and 2009, including the stimulus, can stand as an example for Europe.
In a tense meeting here at this storied presidential retreat, it seemed at times as if it was Ms. Merkel — who faces stiff opposition at home to more bailouts of its neighbors by German taxpayers — against the world. Things did not seem to get off to a good start either on Friday night, as Mr. Obama greeted his guests for dinner in a rustic wood cabin.
“How’ve you been?” Mr. Obama asked Ms. Merkel.
She shrugged and pursed her lips.
“Well, you have a few things on your mind,” Mr. Obama said consolingly.
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