The leaders of the G8 will meet this weekend for the annual G8 summit at Camp David, in Maryland. There, they will attempt to resolve the most recent European financial crisis and quell fears that Greece could leave the Euro zone and undermine the euro, the European Union’s common currency.
President Barack Obama will be hosting the G8 and is expected to urge his European counterparts to do more to stimulate their flagging economies. The White House’s spokesman, Jay Carney, said that Obama’s position is that Europe needs "A balanced approach that includes not just austerity but growth and job creation.”
In the U.S., there are concerns that the sluggish European economy and renewed euro crisis could damage the delicate U.S. economy. And for President Obama, whose re-election prospects will likely hinge on the U.S. economy’s condition, getting Europe to grow again is a matter of political survival.
The leaders slated to attend the summit include France’s Francois Hollande, Yoshihiko Noda of Japan, Italy’s Mario Monti, Britain’s David Cameron, Canada’s Steven Harper, Germany’s Angela Merkel, as well as the complete European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy. Russia’s Prime Minister, Dmitri Medvedev, will also be in attendance.
President Obama’s National Security Adviser, Tom Donilon, explained why it is important for the G8's leaders to meet, saying said the U.S. is hoping the Europeans will consider implementing programs that recognize the "imperative for jobs and growth.” He added that "the president looks forward to leading a discussion among the leaders about the imperative of having a comprehensive approach to manage the crisis and get on a sustainable path towards recovery in Europe."
While no major economic policy decisions are expected to be generated by this year’s G8 talks, it’s likely that President Obama is hoping that Europe’s leaders will come to an understanding about how best to revitalize their economies.
In 2008 and 2009, the Obama administration spent heavily in an attempt to lessen the impact of recession. The major European economies, in contrast, implemented austerity measures. Europe’s current leadership seems to be warming to Obama’s Keynsian approach: the UK’s David Cameron has vocally demanded that Europe’s leaders act more aggressively, new Italian premier Mario Monti has been calling for growth measures and France’s new president, Francois Hollande has shown himself to be in favor of job-creating investments and deficit spending.
Only Germany's Angela Merkel, who has been a staunch and consistent advocate on debt reduction programs, is likely to be unreceptive to Obama’s appeals.
The G8’s leaders are convening at a time when Greece shows signs of potential collapse and looks as if it might withdraw from the single currency euro zone. The already skittish global financial markets fear for the future of the entire currency zone. As a result, the U.S. dollar climbed, world shares fell and German borrowing costs hit record lows on Friday. All of this highlights why it is important for the G8's leaders to meet and develop a coordinated response to the continuing world economic crisis.