Sunday, 20 May 2012
G8 Summit Camp David - Agreement on the Problem but No Consensus
President Obama hosted the G8 Summit at Camp David in Maryland. The talks evolved for the most part on the situation in Greece and how to deal with Iran and Syria. While the official communique attempted to show unity in the approach of G8 leaders, there is a sharp disagreement between those pushing debt and deficit reduction and those that would want to cut back on austerity and provide further stimulus.
The socialist newly elected President of France, Francois Hollande is pushing stimulus, supported by President Obama and Italian Prime Minister Monti. On the other side of the issue are German Chancellor Angela Merkel, Canadian Prime Minister Stephen Harper and UK Prime Minister David Cameron. Merkel, who lost her major ally, former French President Sarkozy, now has to deal with Hollande on the Greek crisis.
There is no doubt that President Obama and President Hollande are on the same page when it comes to stimulating the economy. Merkel on the other hand has to deal with her German electorate, which is tired of bankrolling countries in Europe that have lower retirement ages and lucrative pensions. One has to wonder if President Obama thinks this is fair?
Merkel has insisted that the course of the Eurozone remain on debt and deficit reduction. Merkel said that the the G8 wants send out a unified signal that solid finacing and growth go hand in hand and should not be played against each other. She said that there were three efforts that can achieve success. First by consolidating budgets, second through structural reform and in investments for the future. She said all were united that stimulus programs should not be repeated for the time being.
Prime Minister Harper summed it up this way:
"Fiscal discipline and economic growth go hand and hand. All of our discussions recognize that," Harper said. "Fiscal discipline is not sufficient for economic growth, but it is absolutely necessary."