Leaders vow support for Greece at G-8 summit

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By Jeff Mason and Laura MacInnis, Reuters

CAMP DAVID Maryland–World leaders backed keeping Greece in the eurozone on Saturday and vowed to take all steps necessary to combat financial turmoil while revitalizing a global economy increasingly threatened by Europe’s debt crisis. A summit of the G-8 leading industrialized nations came down solidly in favor of a push to balance European austerity — an approach long driven by German Chancellor Angela Merkel — with a new dose of U.S.-style stimulus seen as vital to healing ailing euro-zone economies. But it was clear that divisions remained. “We commit to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognizing that the right measures are not the same for each of us,” the leaders said in a joint statement issued at their meeting at the Camp David presidential retreat in Maryland. In the first line of their final economic communique, they essentially endorsed calls to broaden Europe’s focus beyond German-backed fiscal belt-tightening, calling it “our imperative” to promote growth and job creation. Anxious to quell investor fears, the G-8 said: “We reaffirm our interest in Greece remaining in the eurozone while respecting its commitments.” But leaders offered no specific prescription for extracting Athens from its worsening crisis. Spain too has roiled markets by revealing huge bad loans in its banking system as it struggles to rein in its budget while facing recession.

Merkel, increasingly isolated by a French-led push for a more growth-oriented approach, sought to play down the differences, saying: “Solid finances and growth belong inseparably together and should not be put into contrast.” Obama, who has pressed Europe for more growth-boosting measures like those he pursued at home, used his closing statement to remind euro-zone leaders that the stakes were high and there could be “enormous” costs if they failed.