Euro gloom casts shadow over G8 summit

European Union and Greek flags Photo: REUTERS/Yannis Behrakis

The leaders of the world's eight richest countries are meeting in Camp David, Maryland in the US today to discuss a range of international issues, none more pressing than the political turmoil in Greece and the eurozone crisis.

The issue at the heart of discussion will be whether European economies need a fiscal stimulus to start growing again. Germany is particularly opposed to any suggestion of governments borrowing more money, while France's new president Francois Hollande has called repeatedly for "growth" without giving away many details.

Another important subject is Greece, and whether it will be held to the original terms of the fiscal pact despite growing political pressure.

German Chancellor Angela Merkel and French President Francois Hollande after their talks in Berlin Credit: REUTERS/Fabrizio Bensch

David Cameron has said that he intends to use the summit to push for trade deals, particularly between the EU and the US.

Writing on the Politics Home website he said the G8 meeting offers an opportunity to "free ourselves from the baggage and bureaucracy of past summits and actually get things done".

We must work together to give the world economy the one big stimulus that would really make a difference: an expansion of trade freedoms - breaking down the barriers to world trade and getting global trade moving again.

Where there are coalitions of the willing, we need to seize the opportunities to forge ahead with ambitious deals. So I will be pushing for progress on the trade deals that the EU is pursuing with three of our G8 partners - Japan, Canada and the US.

– prime minister david cameron

On Thursday, the Prime Minister held a short video conference with German chancellor Angela Merkel, French president Francois Hollande and Italian prime minister Mario Monti.

A Downing Street spokeswoman said they discussed the priorities for the G8 summit "including Greece, growth and the importance of expanding trade relations between the US and the EU."

The Prime Minister emphasised the importance of Greece and the Eurozone taking decisive action to ensure financial stability and prevent contagion,"

– downing street
Francois Hollande and his companion Valerie Trierweiler leave the Elysee Palace after the handover ceremony Credit: REUTERS/Benoit Tessier

This will be the first G8 summit for France's newly-inaugurated President Francois Hollande, who may ruffle some feathers after openly challenging austerity measures in Europe during his election campaign.

David Cameron will meet Mr Hollande at the British ambassador's residence in Washington before flying to Camp David. It is only the second time the two leaders have come face to face and they are expected to discuss the euro as well as the withdrawal of French troops from Afghanistan.

Despite representing the left-wing Socialist party in France, President Hollande insists he has much in common with the Prime Minister, and says the major defence and nuclear deals signed by the UK and France in February remain intact.

A drachma coin - talks of Greece leaving the single currency has been rife of late Credit: REUTERS/Yorgos Karahalis

Jose Manuel Barroso, the head of the European Commission, defended Europe's response to the economic crisis as "robust", insisting the EU would maintain its policies - without being "blind" to evolving circumstances.

I would like to reaffirm very clearly that we want Greece to stay in the euro area, and the European Union will do all it takes to ensure it," he said on his way to the G8 summit.

We will honour our commitments towards Greece and we expect the Greek government - current and future - to fulfil the jointly agreed conditions for financial assistance.

– Jose Manuel Barroso, president, European Commission

Russia's newly-inaugurated President Vladimir Putin will not be attending the summit, sending Prime Minister Dmitry Medvedev, the former president, in his place. His absence is being seen as a snub to President Obama.

The full list of topics to be covered at the summit spans food security for Africa to the nuclear debate with Iran, troop withdrawal from Afghanistan, further course of action in Syria and North Korea all the way to climate protection.

The countries attending the talks are: Britain, Canada, France, Russia, Germany, Italy and Japan as well as the US which is hosting the talks.