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‘Loss of momentum’: Target of 41,000 homes built this year looks set to be missed by 6,000
Israeli strikes continue overnight in Gaza, killing 13 people
'Bodies and limbs on the ground' after Israeli strikes kill more than 400 people in Gaza
World leaders attend the first working session of the G-8 Summit at Camp David, Md,, Saturday, May 19, 2012 AP Photo/Philippe Wojazer, Pool
G8
End of G8 summit: Obama talks of 'emerging consensus' on economic fix
The US President spoke of an emerging consensus to promote growth and job creation , while the German Chancellor added that austerity was still on the agenda.
CONFRONTING AN ECONOMIC crisis that threatens them all, President Barack Obama and leaders of other world powers on Saturday declared that their governments must both spark growth and cut the debt that has crippled the European continent and put investors worldwide on edge.
“There’s now an emerging consensus that more must be done to promote growth and job creation right now,” Obama proclaimed after hosting unprecedented economic talks at Camp David, his secluded and highly secure mountaintop retreat. Seeking a second term amid hard economic times, Obama hailed a debate heading in the direction he likes, with nations now talking of ways to spark their economies instead of just slashing spending.
Yet there were no bold prescriptions at hand. Instead, leaders seemed intent on trying to inspire confidence by agreeing on a broad strategy no matter their differences. With all of them facing their own difficult political realities, they built some sovereign wiggle room into their pledge to take all necessary steps, saying “the right measures are not the same for each of us.”
Obama played international host as Europe’s debt crisis threatens to drag down the US recovery and his own political future, underscoring the stakes for him in getting allies abroad to rally around some answers.
Much of the new emphasis on government-led growth seemed aimed at German Chancellor Angela Merkel, who came to the summit as the European leader who had demanded austerity as the most important step toward easing the eurozone’s debt crisis. But the election of Socialist Francois Hollande as president of France, and Greek elections that created political chaos in the country were clear rejections of the belt-tightening Merkel represented.
Hollande, a new voice at the table in just his first week on the job, offered Obama a reminder of his own responsibilities to work to expand the economy, “even if he’s in an electoral period and who has a Congress that’s not necessarily easy to deal with.”
Oil markets
Coping with shaky oil markets, the leaders set the stage for a united release of world oil reserves to balance any disruption in world markets when tough new sanctions are imposed on Iran’s exports because of its disputed nuclear program. The leaders said they were ready to take “appropriate action” to meet any shortages.
The mere preparation to release oil reserves could help calm markets and ensure that oil prices, which have been dropping, don’t climb again and anger consumers as US elections approach.
The Group of Eight summit includes leaders of the United States, Japan, Britain, Germany, France, Italy, Canada and Russia.
A joint summit statement reflected how urgently the countries must contain a financial crisis that could spread from the eurozone to the United States and infect the rest of the global economy. They declared unanimity in ensuring that Greece, which is crippled in debt and politically gridlocked, remains as part of the 17-member euro currency union.
“The leaders here understand the stakes,” Obama said in summing up a packed, unusually intimate day of world talks. “They know the magnitude of the choices they have to make and the enormous political and economic and social costs if they don’t.”
Merkel said growth and deficit-cutting reinforced each other and that everyone around the table agreed. “That is great progress,” she said. As for promoting growth, she said investments under consideration include research and development, Internet networks and infrastructure. But she said “this doesn’t mean stimulus in the usual sense.”
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Growth
US officials agreed, saying growth measures that the Europeans might pursue don’t all require outright public spending, and could be in the form of public-private partnerships or in initiatives designed to loosen credit. And the leaders stayed away entirely from the world “stimulus,” which has taken on an unpopular political connotation, including in the United States.
“The global economic recovery shows signs of promise, but significant headwinds persist,” said G-8 leaders said.
The tension between austerity and growth — whether to slash debt by cutting budgets or use public money and other means to help spur economic growth — was the backdrop as Obama welcomed an emerging push for a balance between the two.
He seized the opportunity to cast the debate in terms favorable to his own re-election, closing the summit with the steps he took to right the US economy and his economic vision for a second term. He said he was confident Europe could get on a path to recovery as has the United States.
“We know it is possible in part based on our own experience here,” he said. “In my earliest days in office, we took decisive steps to confront our own financial crisis.”
Obama chose Camp David in part to encourage a freewheeling discussion out of sight of most media and potential protests, allowing the leaders to sit around a cabin table to negotiate terms, or stroll through the leafy paths for chats that seemed a world away from the typical summit convention-hall setting.
It all came before Obama was to lead a much larger NATO summit in Chicago on Sunday and Monday that will be heavily focused on the Afghanistan war.
The drag of a eurozone crisis comes as joblessness and doubts about a life of better opportunities are already the chief concerns for American voters.
Push for austerity
In their united view, the leaders conceded some points about Merkel’s push for austerity, saying budget deficits must close.
But their joint statement added that budget cutting should “take into account countries’ evolving economic conditions and underpin confidence and economic recovery.” That suggested a willingness to let indebted countries take more time to reduce their deficits in line with eurozone rules in order to lessen the deadening impact of cuts on the economy.
It also called for “investments in education and in modern infrastructure,” which would involve more government spending. That approach also meshes exactly with Obama’s campaign-year strategy for accelerated economic growth, which is to keep spending money on core priorities while taking on the debt through cuts and higher taxes.
The statement of support for Greece remaining in the euro underlines the unpredictable damage to the global financial system that could come from a Greece departure. It follows a week of increasing speculation that Greece might not be able to stay the course, and in which a top European Union official said officials were working on emergency plans in case of a Greek exit. That country is facing the most acute financial crisis of the eurozone and is set to hold elections June 17 to end political deadlock.
At issue is whether Greece abandons the euro to escape austerity measures. Meanwhile, Europe’s woes have given shudders to Wall Street.
The Fitch ratings agency dropped Greece to the lowest possible grade for a country not in default Thursday. Fitch said Greece’s departure from the euro “would be probable” if elections next month do not reverse political trends there, which have brought in politicians opposed to the terms of Europe’s bailout.
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If all this debt has to be repaid, then the only answer is to extend the repayment schedules to hundreds of years at rock-bottom interest rates. That it seems is the only way the euro can be saved! As for that treaty, it’s fast becoming completely obsolete! It has no relevance whatsoever in the grand scheme anymore!
The crisis is moving on, the world is moving on. The focus is now finally on growth as austerity is obviously not working. Only Germany, the only country in Europe who can satisfy the conditions enshrined in the fiscal compact without additional austerity, and its Vichy lickspittles in the Dail are still pushing the austerity treaty ‘as is’.
Its going to be changed, this much we know.
Would you sign a blank cheque and hand it to the peope screwing you over?
Would you sign a contract knowing that solicitors who are acting in other peoples interests will make changes to it later?
Of course not, you’re not stupid. Our government, however, think that we are.
Vote NO on the 31st, because we don’t know what we’re voting ‘yes’ to, do we?
Irish politicians advocating a Yes vote come across like junkies who might be denied their fix if we vote No. Hollande must have scared the crap out them when he cut his pay by 30%
Merkel gave herself a pay rise last week so that she finally now earns the same as Kenny.
Kenny: cut your pay by 30% as a first step towards balancing our books. We cannot afford Croke Park
Are you advocating cutting the pay of low and middle income public servants as well? You DO realise that they’ve already seen cuts of on average 15% on top of the extra taxes everybodys been hit with?
I wouldn’t touch anyone on the average industrial wage or below. Anyone above would be subject to a sliding scale from 30% down to 1%. We simply can’t afford to keep spending the way we have been
Id also cap public service pay at 140k so some would be in line for > 30%
Lower paid people tend to save little and spend all they get so cutting them makes no sense. If anything we should ease the burden on people under the average industrial wage as any extra they have get ploughed straight back into the economy
Without sounding nasty, for somebody who goes by the name ‘scrap croke park’ you are showing a breathtaking ignorance to the situation in the public sector as a whole. The croke park agreement will save billions during its lifetime, and save a huge amount of cash thereafter on an ongoing basis. Numbers in some goverment departments have been reduced by a quarter and are absolutely at breaking point.
Oh, and in relation to the ” freeze all public sector pay and ban increments until it comes in line with the private sector”, you are repeating the right wing soundbite divide and conquer crap. Just using my own family as an example, My father (recently retired) was offered agency work doing a similar job for more money. So theres the private sector costing more for the same job, not including the agency fee the tax payer would have to cough up as well. My brother left his public sector nursing job to work fo a private sector company because, since the pay cuts to the public service, he simply could not pay his bills.
So, if you’re going to identify yourself as ‘scrap croke park’ please base your argument on the actual facts on the ground in the public sector rather than the manufactured outrage that denis o’briens media outlets rams down our throats 24/7, turning one section of ordinary worker against another, while the wealthy laugh all the way to the bank.
The Croke Park agreement is a fig leaf to maintain the status quo. Reducing public service numbers to an unsustainable level by issuing golden parachutes is not the answer
Any more right wing soundbites for us all to enjoy? May I suggest ‘gilt edge pensions’?
Y’see, I’ve a little bingo card in front of me here with all the little right wing anti-public service soundbites on it, and you’re helping fill it in for us pretty quick…..
The goalposts are clearly moving. It does not make sense to ratify the fiscal compact until it is clear what our real leaders in Berlin, Paris & Washington hope to achieve.
Strange that the G8 does not include China which is the Worlds second largest economy and has the largest cash reserves. Would they rename themselves G9 if China came in or sack current number 8?
Brazil, India, Mexico and a lot of other countries have far more power than Italy. The G8 is really a council of old world power and really fails to adapt to the times.
Interesting that at the same time as Obama gives his one size does not fit all soundbite at the end of this confernce that is PRECISELY what Ireland is being asked to vote in favour of. This referendum is now firmly entering a Beckensian phase.
‘Loss of momentum’: Target of 41,000 homes built this year looks set to be missed by 6,000
Diarmuid Pepper
7 hrs ago
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Israeli strikes continue overnight in Gaza, killing 13 people
30 mins ago
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Ceasefire violation
'Bodies and limbs on the ground' after Israeli strikes kill more than 400 people in Gaza
Updated
11 hrs ago
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