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G-8 focuses on EU crisis

The United States and other members of the Group of Eight industrial nations agree that Europe’s financial crisis must be addressed with a mix of growth and austerity measures, US President Barack Obama said on Saturday as leaders gathered for a shirt-sleeve discussion that also will cover world concerns about ups and downs in oil prices.

“All of us are absolutely committed to making sure that growth and stability and fiscal consolidation are part of an overall package,” Obama said as he and other leaders gathered in a rustic cabin at this wooded presidential retreat.

Obama was referring to the debt crises in Greece and Spain, primarily, although he was not specific in brief remarks to reporters.

Leaders of the United States, Germany, France, Canada, Italy, Britain, Russia, and Japan are trying to figure out how to tame Europe’s debt crisis while also increasing the demand for goods and spurring job growth.

Obama’s argument for additional stimulus measures alongside belt-tightening is primarily aimed at Germany, the strongest member of the union that uses the common euro currency, although Obama did not say so. Leaders of the world’s economic powers say Germany should balance its push for European fiscal austerity with doses of stimulus spending to avoid a financial calamity with global repercussions. In talks on Saturday, the leaders were looking to build consensus even though a decisive plan of action seemed out of reach for now. “We’ll also be talking about uncertainty in the energy markets and how to resolve some of those issues,” Obama said at the start of discussions on the global economy.

“We will do whatever is needed to guarantee the financial stability of the eurozone,” EU President Herman Van Rompuy said.

Earlier French President Francois Hollande suggested using European funds to inject capital into Spain’s banks, which would mark a significant acceleration of EU rescue efforts.

The G-8 session sets the stage for a far more consequential European summit in Brussels next week where the countries that share the euro as their currency hope to come together on specific steps to fight rising debt while spurring a recovery.