In a joint statement, the leaders of eight of world’s richest countries said they would promote investment in education and infrastructure, as they also sought to rein in government debt. Obama, who has pushed for additional fiscal stimulus in the United States, said the new agreement affirmed the course his administration pursued during the financial recession at home. He said the move toward economic stimulus bolstered Europe’s chances of surviving the crisis.
“The direction the debate has taken recently should give us confidence that Europe has taken significant steps to manage the crisis,” Obama said in a brief statement to reporters outside his wooden cabin nestled in the leafy presidential retreat in the Catoctin Mountains. “There is now an emerging consensus that more must be done to promote growth and job creation right now in the context these fiscal and structural reforms.”
After his remarks, Obama was set to hold a formal bilateral meeting with German Chancellor Angela Merkel, who has championed the austerity approach and argued that growth will return more predictably if governments reduce their debt and pursue policies to make their economies more efficient.
Merkel has found herself increasingly isolated as other European nations struggle with high unemployment and low prospects for recovery in the near term.
A popular political backlash has pushed Greece close to exiting the euro zone and elevated Socialist Party candidate Francois Hollande to the French presidency on the strength of a growth agenda.
Still, there was more than a nod to Merkel’s point of view in the joint statement. The Group of Eight pledged a “firm commitment to implement fiscal consolidation,” efforts to “combat financial stresses” and economic policy reforms that would increase efficiency.
But growth and jobs were cited as the “imperative” – a change from other summits where the same countries set strict timetables for cutting deficits. National debt and deficit targets, moreover, were to be analyzed on a “structural basis,” an important distinction that lets countries accumulate more government debt during bad economic times.
Obama administration officials were careful to emphasize that the other leaders did not gang up on Merkel during two days of meetings at Camp David. Obama, aides said, made sure to spend time informally with each leader, strolling with Merkel along paths and sitting with her on the porch outside the Laurel Lodge.