Saturday

25th Feb 2017

Obama presses EU leaders on growth

A weekend summit of G8 leaders hosted by US President Barack Obama stressed the need for the eurozone to focus on keeping Greece inside the euro - although plans are reportedly being drafted to deal with its potential exit.

"Our imperative is to promote growth and jobs.The global economic recovery shows signs of promise, but significant headwinds persist," leaders from the US, Japan, Canada, the UK, Germany, Italy, France and Russia, as well as the heads of the EU commission and the European Council, said in their final statement on Saturday (19 May).

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Football intermezzo at the G8 meeting: the UK's Chelsea won against Germany's Bayern Muenchen (Photo: The White House/Pete Souza)

The informal meeting at Obama's retreat in Maryland was an opportunity for the US president to show support for those EU leaders - such as France's new president Francois Hollande and Italian premier Mario Monti - pushing for less austerity-focused eurozone policies.

After the G8 summit, Obama warned about the effects of the eurozone crisis on the world economy.

"As all the leaders here today agreed, growth and jobs must be our top priority. A stable, growing European economy is in everybody's best interests, including America's," he said.

The final G8 statement was a typical diplomatic mix embracing both 'fiscal consolidation' and 'generating growth.' It reflected the strength of discussions on the importance of promoting growth - pushed by Washington and Paris - and the importance of maintaining the austerity line - pushed by Germany.

"We all have an interest in the success of specific measures to strengthen the resilience of the eurozone and growth in Europe. We support euro area leaders’ resolve to address the strains in the eurozone in a credible and timely manner and in a manner that fosters confidence, stability and growth," it says.

The statement also "affirmed" the leaders' "interest" in Greece remaining in the eurozone but noted the country must respect the terms of the austerity programme attached to the €130 billion bail-out.

Worries that a left-wing government after the 17 June election may drive the southern country out of the eurozone have prompted mass withdrawals from Greek banks.

This in turn has prompted ever more urgent statement by politicians.

"Contingency plans need to be put in place and the strengthening of banks, governance, firewalls - all of those things need to take place very fast," Britain's David Cameron told reporters.

But some reports suggest that EU officials may already be preparing for Athens' exit from the 17-nation eurozone.

EU trade commissioner Karel De Gucht on Friday told De Standaard newspaper that the commission and the European Central Bank were "working on emergency scenarios if Greece does not make it."

The EU's 27 commissioners reportedly talked about such a scenario last Wednesday, a senior EU official told the Wall Street Journal.

The flight of deposits from the Greek banking system threatens to accelerate the timetable of a potential exit, the source said: "If it reaches large dimensions then it's not solvable. At the current moment, it's manageable."

Spain hit by downgrades amid Greek contagion fears

Spain's economic woes deepened on Thursday as 16 of its banks and four regions were downgraded by Moody's, while statistics confirmed the country is still in recession, just as fears about a Greek euro-exit are running high.

Euro fears rise as Greeks withdraw money from banks

Greeks have withdrawn billions of euros from their banks in recent days, with the country's president warning of "panic" at the prospect of the country leaving the eurozone. Markets are equally jittery, pushing Spain closer to a bail-out.

News in Brief

  1. Spanish court jails former IMF chief Rato
  2. Macron proposes Nordic-style economic model for France
  3. Germany posts record high budget surplus
  4. Labour ousts Ukip in Brexit homeland
  5. Dutch lower house approves EU-Ukraine treaty
  6. WTO says Russian pork ban was illegal
  7. Belgian nuclear plant made 'significant progress' on safety
  8. Report: Commission gauging EU support for Poland sanctions

Stakeholders' Highlights

  1. EURORDISJoin the Rare Disease Day and Help to Advocate for More Research on Rare Diseases
  2. European Healthy Lifestyle AllianceStudents Who Are Considered Fit Get Better Grades in School
  3. QS World MBA TourMeet with Leading International Business Schools in Paris on March 4th
  4. Malta EU 2017Economic Governance: Agreement Reached on Structural Reform Support Programme for Member States
  5. Socialists & DemocratsWomen Have to Work Ten Years Longer to Match Lifetime Earnings of Men
  6. Counter BalanceTrans-Adriatic Pipeline Is a Major Risk for Banks, Warns New Analysis
  7. Martens CentreEU and US Migration Policies Compared: Join the Debate on February 28th
  8. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow
  9. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen
  10. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps
  11. Nordic Council of MinistersNordic Innovation House Opens in New York to Help Startups Access US Market
  12. Centre Maurits CoppietersMinorities and Migrations