G8 warns Greece it must sort out crisis

THE Group of Eight leaders, meeting in France yesterday, piled pressure on Greece to sort out its debt crisis, saying the debts of some European governments were weighing down a labouring world economy.

One European diplomatic source said the US delegation, led by President Barack Obama, had voiced concerns about a weaker euro, hit by the debt crisis, hurting US export efforts.

US officials were not immediately available to comment, but the diplomat from an EU country said Washington had “asked for a serious debate about the euro’s weakness against the dollar that could create problems for US exports.”

European members of the G8 — Germany, France, Britain and Italy — along with EU officials would commit in a summit statement from the resort of Deauville to continue efforts to rein in the eurozone debt crisis, EU sources said.

However, the draft communique also called on the US and Japan to make sure their own public finances were sustainable over the long term, another European diplomat said.

The concern over the global economy came at a time when the wealthy nations are trying to offer financial and other support to new democracies in North Africa created by the Arab Spring uprisings. It was a reminder of the West’s finite resources.

The G8 leaders called on another Arab leader, Yemen’s President Ali Abdullah Saleh, to quit, hoping to avert civil war flaring up following a day of heavy bloodshed. They were also expected to endorse aid programmes for Tunisia and Egypt, which have overthrown autocratic rulers once supported by the West.

Briefing reporters at the summit in Deauville, Japan’s deputy chief cabinet secretary, Tetsuro Fukuyama, said leaders of the seven big Western industrial powers plus Russia agreed Athens must do more to sort out its finances and work with the International Monetary Fund to solve its debt crisis.

The Greek government has called emergency talks with the opposition for today as repayment deadlines loom and European officials have warned that aid could be withheld for a country where millions face many years of austerity at best.

Japan’s Fukuyama said: “Many leaders pointed out that Europe’s debt problem, the price hikes of oil, food and commodities, and the overheating of emerging economies are among factors that put downwards pressure on the global economy.”

On Yemen, summit host France said President Saleh must end his 33-year rule.

“We deplore the fighting that occurred overnight which was a direct result of the current political impasse, for which President Saleh has direct responsibility due to his refusal to sign the GCC transition agreement,” a foreign ministry spokesman said.

David Cameron, the British prime minister, said the summit would show Arabs on the street that the world stood behind them:

“I want a very simple and clear message to come out of this summit, and that is that the most powerful nations on earth have come together and are saying to those in the Middle East and North Africa who want greater democracy, greater freedom, greater civil rights, ‘We are on your side’.”

Among a range of matters discussed among the leaders Obama told Russian President Dmitry Medvedev that he wanted a rapid entry for Moscow into the World Trade Organisation.

And Medvedev confirmed post-Soviet Russia’s first big purchase of foreign arms — ordering four amphibious assault ships from a French-led consortium.

Obama and Sarkozy led tributes to the Serbian government for its arrest of Bosnian Serb war crimes suspect Ratko Mladic. The French president called it “courageous” said it would bring former pariah Belgrade a step closer to integration with the EU.

Internet tycoons, including Facebook founder Mark Zuckerberg and Google chairman Eric Schmidt, met the leaders to discuss proposals for balancing freedom on the web with protections for privacy and intellectual property.

Reuters