Sunday Observer Online


Sunday, 27 June 2010





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G8 leaders seek common ground on debt crisis

HUNTSVILLE, Canada, June 26 Europe and the United States tried Friday to bridge differences over how to sustain fragile global economic recovery and sought common ground on dealing with ballooning deficits.

As the G8 summit of the world's major developed economies got underway in Canada, all eyes were on a potential clash between European leaders bent on slashing spending and a Washington fearful of stifling growth.

Germany's Chancellor Angela Merkel showed her hand early, insisting members must move fast to cut soaring public deficits and ensure financial stability.

But both she and US officials stressed this did not represent a split with the United States, and said both European and other G8 powers were looking for a balance between debt reduction and support for growth.

"I have made it clear that we need sustainable growth and that growth and intelligent austerity measures don't have to be contradictions," Merkel said.

"The discussion was not controversial, there was a lot of mutual understanding," she told journalists after the first exchanges of the summit in an exclusive lakeside resort north of the Canadian city of Toronto.

A senior US official, speaking on condition of anonymity, confirmed the meeting had gone well and that Merkel and US President Barack Obama had not fallen out over Germany's call for immediate fiscal tightening.

"The president sees deficit reduction as part of a medium and long-term growth strategy. Coming to the G8 and G20 his main focus is these things are not exclusive," the administration official told reporters.



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