Italian Prime Minister Mario Monti is welcomed by U.S. President Barack Obama at the G8 summit in Camp David, May 18, 2012. Leaders of the major industrial economies are meeting for a G8 Summit at Camp David this weekend to try to head off a full-blown financial crisis in Europe. (Photo : REUTERS/Philippe Wojazer)
President Barack Obama will press European leaders to ease up on fiscal austerity and focus on economic growth at a summit on Saturday that will discuss ways to stem turmoil in the euro zoneand head off the risk of global contagion.
At the wooded Camp David retreat in Maryland's Catoctin Mountains, Obama and leaders from other large economic powers will try to forge a common approach to tackling a crisis that threatens the future of Europe's 17-nation single currency.
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Though no major policy decisions are expected from the Group of Eight summit, leaders hope they can bridge enough of their differences to soothe rattled financial markets after worries about the risk of a Greek exit from the euro zone sent European stock prices to their lowest level since December.
"Hopefully we'll get some stuff done," Obama told Italian Prime Minister Mario Monti as he and other summit participants arrived for Friday evening dinner at a lodge at the secluded presidential retreat.
Obama earlier in the day aligned himself with Monti and new French President Francois Hollande by urging a solution to the euro zone crisis that combines fiscal belt-tightening measures with a "strong growth agenda."
On the other side of the debate is German Chancellor Angela Merkel, who has pushed fiscal austerity as a means of bringing down huge debt levels that are burdening European economies.
Voters in euro zone countries have shown frustration with that approach, ejecting governments such as that of Nicolas Sarkozy, who was defeated by Hollande, a socialist, in the May 6 French presidential election.
A draft of the summit communiqué shown to Reuters will stress an "imperative to create growth and jobs."
Also on the summit agenda are concerns about oil and food prices as well as Afghanistan, Iran, Syria and North Korea.
Speculation has grown that Obama will use an energy session at the G8 to seek support to tap emergency oil reserves before a European Union embargo of Iranian crude takes effect in July.
But with oil prices already sliding, a move by Obama to tap the Strategic Petroleum Reserve - alone or along with other countries - could expose him to criticism that the emergency supply should only be touched in a supply crisis.
The Camp David summit kicked off four days of intensive diplomacy that will test leaders' ability to quell unease over the threat of another financial meltdown as well as plans to wind down the unpopular war in Afghanistan.
After the Camp David talks wrap up late on Saturday afternoon, Obama will fly to his home town of Chicago where he will host a two-day NATO meeting at which the Afghanistan war will be the central topic.