19 May 2012

World leaders talk as Greek tragedy unfolds

10:27 pm on 19 May 2012

A growing chorus of world leaders is pushing for a shift toward more pro-growth policies as a way of tackling the European crisis.

Setting the tone for the weekend G8 summit at Camp David in the United States, President Barack Obama has aligned himself with the new French president Francois Hollande in advocating more economic stimulus in Europe.

Mr Obama told reporters that the aim of the summit was to promote both fiscal discipline and a "strong growth agenda," the BBC reports.

"President Hollande and I agree that this is an issue of extraordinary importance not only to the people of Europe but also to the world economy," Mr Obama added.

The US president's stance stance reflects his worries that the euro zone contagion, which threatens the future of the single currency, could hurt the fragile US economic recovery and his own re-election chances in November.

Speaking after the meeting, Mr Hollande said Spain's banks should be recapitalised by Europe's bailout funds and everything must be done to keep Greece in the euro zone.

The French president, who took office this month, said he and Mr Obama shared "the same conviction that Greece must remain in the eurozone".

After talking to Mr Hollande, the British prime minister, David Cameron, has also indicated a shift in emphasis.

Mr Cameron said that Greece must decide if it wanted to remain in the euro.

"We need decisive action from eurozone countries in terms of strengthening eurozone banks, in terms of a strong eurozone firewall and decisive action over Greece. That has to be done."

Before leaders at the summit resumed their efforts to reach agreement on tackling the eurozone crisis, they discussed over dinner Iran and North Korea's nuclear ambitions, and the uprising in Syria.

They agreed:

* North Korea faces further isolation, if it "continues down the path of provocation"

* Iran's government has the onus to prove the claim that its nuclear programme was peaceful

* The UN-backed peace plan on Syria has yet to be fully implemented

After the G8 summit ends on Saturday evening, most of the leaders will decamp to Chicago to join a larger group of international officials for a Nato summit on Sunday and Monday, at which Afghanistan is expected to be the main item on the agenda.