The Telegraph
Monday , May 21 , 2012
Since 1st March, 1999
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G8 moots twin revitalisers

Camp David (Maryland), May 20 (Reuters): World leaders backed keeping Greece in the Eurozone on Saturday and vowed to take all steps necessary to combat financial turmoil while revitalising a global economy increasingly threatened by Europe’s debt crisis.

A summit of the G8 leading industrialised nations came down solidly in favour of a push to balance European austerity — an approach long driven by German Chancellor Angela Merkel — with a new dose of US-style stimulus seen as vital to healing ailing Eurozone economies. But it was clear that divisions remained.

“We commit to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognising that the right measures are not the same for each of us,” the leaders said in a joint statement issued at their meeting at the Camp David presidential retreat in Maryland.

The overarching message from the summit hosted by President Barack Obama reflected his own concerns that the Eurozone contagion, which threatens the future of Europe’s 17-country single currency block, could hurt the fragile US recovery and his re-election chances in November.

With Greece’s political and economic upheaval high on the summit’s agenda and stoking concerns over instability in Spain and Italy, the G8 leaders sought to calm the situation.

In the first line of their final economic communique, they essentially endorsed calls to broaden Europe’s focus beyond German-backed belt-tightening, calling it “our imperative” to promote growth.

Anxious to quell investor fears, the G8 said: “We reaffirm our interest in Greece remaining in the Eurozone while respecting its commitments.” But leaders offered no specific prescription for extracting Athens from its worsening crisis.

It was unusual for the G8 communique to single out a relatively small nation. But fears that a political stalemate in Greece would lead to its departure from Europe’s monetary union and global economic stability have spooked markets.