Guardian Angela Merkel on Greece at G8 talks Ολοταχως για ευρωομολογο

After inconclusive discussions, leaders issue communique saying 'the right measures are not the same for each of us'

 

 

Angela Merkel has declined to shift position on fresh measures to stimulate demand in the euro area, including the idea of eurobonds, leaving other EU countries hoping she will adopt a more conciliatory mood when the EU heads of government meet on Wednesday for the next round of discussions.

 

Barack Obama left the German chancellor in no doubt that he would like to see her adopt a less confrontational stance towards the Greek government, during a heated two-hour discussion at the G8 summit at Camp David, outside Washington.

 

Obama, facing a presidential election in November, cannot afford US jobless numbers to rise this autumn, a serious possibility if there is no return of confidence in Europe. He is said to understand the necessity for the Greeks to undertake spending cuts, but stressed the same austerity approach across Europe would simply lead to recession.

 

Following the discussion on Saturday, the G8 issued a communique that tried to reference all positions, including the right of the G8 to discuss the state of the European economy.

The communique pointedly asserted that "the right measures are not the same for each of us", and committed the G8 to "take all necessary steps" to strengthen their economies. It said they wanted to keep Greece in the eurozone and vowed to work to promote growth in Europe, although behind the scenes distinct differences remained over what kinds of stimulus policies to pursue.

 

"Our imperative," the leaders said in their statement, "is to promote growth and jobs." The next test will come when the markets reopen and give their response to what have been inconclusive discussions.

 

British officials said it was absurd that at one point Merkel seemed to want to remove most references to the eurozone crisis from the communique.

 

David Cameron tried to act as conciliator between the positions of the Germans, French and Italians. He said he understood the desire of Mario Monti, the Italian prime minister, to see more structural reform to boost competitiveness. He said he could acknowledge the emphasis on growth advanced by François Hollande, the French president, with his proposal for Project Bonds, a form of capital investment. He also agreed with Merkel that the peripheral countries such as Greece need to take decisive action to address deficits.

Cameron is keen to see Germany and the European Central Bank do more to accept the mutualisation of euro sovereign debt through eurobonds, but recognises that this would require the German taxpayer to carry a heavier burden at a time when Merkel is already being trounced in the polls by voters angry at the extent to which Germany is taking on the bulk of the cost of the euro crisis. Merkel faces elections herself next year.

 

It is understood that Cameron regarded the quality of the discussion as one of the best he had heard from European leaders for more than a year, even if it produced little tangible in the short term.