News / USA

G8 Leaders Discuss Economic Growth, Fiscal Restraint



On the first day of the G8 summit in Canada, President Barack Obama and other world leaders held initial discussions on ways to strengthen the global economy and build on commitments from past summits.  Senior U.S. administration officials point to what they call an emerging consensus on the issues of sustaining global economic growth, and fiscal responsibility.

Canadian Prime Minister Stephen Harper formally welcomed President Obama and other leaders to the resort north of Toronto, shaking hands with each before the G8 group went into a working lunch, and sessions with leaders from African, Latin American and Caribbean nations invited to the summit.

The G8 includes the eight leading industrial democracies, the U.S., Canada, Britain, Germany, France, Italy, Japan and Russia, while the larger G20 includes such major emerging powers as China, India and Brazil.

In remarks before he departed Washington,  Mr. Obama said he hopes nations will decide to build on progress by coordinating efforts for economic growth, pursue economic reform, and strengthen the world economy.

"We need to act in concert for a simple reason.  This crisis proved and events continue to affirm that our national economies are inextricably linked, and just as economic turmoil in one place can quickly spread to another, safeguards in each of our nations can help protect all nations," he said.

The president  has been strengthened by an agreement on Friday by House and Senate negotiators on a final version of legislation to reform the U.S. financial system.  Both chambers of Congress will have to approve the bill before the president can sign it.

Senior administration officials said G8 leaders congratulated the president on the development, noting the impact it could have in putting positive rules in to place to prevent another U.S. financial crisis.

White House spokesman Robert Gibbs was asked earlier how this would impact president's efforts to steer the G8 and G20 summits toward outcomes he prefers. "I think it demonstrates to the world the steps that we have to continue to take globally in order to ensure that we don't find ourselves in a situation like we did two years ago," he said.

Many G8 leaders face demands in their countries for greater restraint in public spending and pressure to sharply reduce government budgets and deficits.  Canada's Prime Minister Stephen Harper has called on G20 nations to cut their deficits in half by 2013.

Senior U.S. Administration officials said the president stressed the need to maintain durable growth while stressing that this also involves fiscal consolidation and debt reduction in the medium term.  

The  officials pointed to confidence about a convergence of views on a broad approach by G20 nations, and said Friday's discussions were a first step on the way to a final outcome on Sunday when the G20 concludes.  

President Obama and other G8 leaders also turned their attention to the developing world, meeting with African leaders invited to the summit, and leaders from Haiti, Jamaica and Colombia.   

Canada's prime minister said a new G8 initiative aims to direct new resources to reducing maternal and infant mortality, adding that Canada would contribute $3 billion over the next five years.  He said the world's wealthier nations must follow through on commitments.

Saying G8 credibility rests on a willingness to honor past commitments, the White House put out a statement listing areas in which the U.S. has fulfilled pledges in areas such as aid to Africa, debt relief, and global health and HIV/AIDS prevention.

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