"Against this backdrop, we commit to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognising that the right measures are not the same for each of us," it said in a communique. The leaders said they welcomed discussions in Europe to balance debt reduction with measures to support growth and added: "We reaffirm our interest in Greece remaining in the eurozone while respecting its commitments."
It was unusual for the often-bland G8 communique to single out a small nation. But fears that a political stalemate in Greece would lead to the tiny Mediterranean country leaving Europe's monetary union at unknown costs to the financial system have spooked global markets. US President Barack Obama and leaders from other major economic powers met to discuss the global economy and seek ways to soothe markets after worries about Spain's banking problems also played a role in sending world stock prices to their lowest levels this year.
Earlier, a shirt-sleeved Obama opened the morning session, promising to seek ways to restore healthy growth and jobs and address concerns in Europe. "All of us are absolutely committed to making sure that both growth and stability, and fiscal consolidation, are part of an overall package in order to achieve the kind of prosperity for our citizens we all are looking for," Obama said.
British Prime Minister David Cameron, after an early morning treadmill workout with Obama at the Camp David gym, said he detected a "growing sense of urgency that action needs to be taken" on the eurozone crisis. London relies heavily on international finance and banking instability would strike a fresh blow to an economy already in recession.
"Contingency plans need to be put in place and the strengthening of banks, governance, firewalls - all of those things need to take place very fast," he told reporters. European leaders seemed keen to stress on Friday that they would stand firm in protecting their banks, after news of escalating bad loans raised the specter that rescuing Spain's banks would crash the eurozone's fourth largest economy.
"We will do whatever is needed to guarantee the financial stability of the eurozone," European Union 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.
An Italian newspaper reported that Italian Prime Minister Mario Monti has proposed at the G8 summit creating a Europe-wide system of bank deposit insurance. Officials had no immediate comment. Beyond stabilising the financial system, a key issue on the agenda is how to balance a growth with efforts to lower government debt through fiscal belt tightening. Obama has aligned himself with Monti and the new French president in putting more emphasis on growth.
That places pressure on German Chancellor Angela Merkel, who has pushed fiscal austerity as a the prime means of bringing down huge debt levels that are burdening European economies. Voters in eurozone countries have shown frustration with that approach, ejecting the Greek government. In France the conservative Nicolas Sarkozy was defeated by Hollande, a socialist, in the May 6 elections.
A draft of the summit communiqué shown to Reuters will stress an "imperative to create growth and jobs." There are signs of softening in Germany's austerity stance. Germany's largest industrial union, IG Metall, struck its biggest pay deal in 20 years early on Saturday. The 4.3 percent pay increase, more than double Germany's inflation rate, will boost worker buying power in the eurozone's richest nation and lift consumption - something the United States long has urged as a means to bolster overall growth throughout the world's second largest economic region.
Obama, in the Saturday discussion on the global economy, advocated a balanced approach, saying there should be "no artificial boosts," G8 delegation sources told Reuters. "We need a growth agenda while maintaining fiscal discipline," he said, according to sources. In the G8 group photo outside the presidential log cabin surrounding by lush green trees, Obama also sought balance. He stood with the leaders of Europe's two largest powers - France and Germany - to his right and his left respectively.