WASHINGTON: US President Barack Obama hopes to return from the Group of Eight and Group of 20 meetings in Canada with new evidence that key powers will fulfill pledges to heal the global economy.
At the G8 "rich nations club" Friday and Saturday in the Muskoka vacation area, north of Toronto, Obama will also meet two new leaders, British Prime Minister David Cameron and Japanese Prime Minister Naoto Kan.
When he goes back to Toronto for the wider G20 of developed and developing nations on Saturday, Obama will also have a flurry of bilateral meetings, which will be used to advance foreign policy goals after six months with little overseas travel.
"These summits give President Obama an opportunity to build on the work that`s been done domestically, economically in terms of restoring growth, (and) renewing our financial system," a senior US official said.
Obama will compare notes on global financial reform efforts, as his own package nears completion in Congress, and talk about cleansing finance with stress tests, recapitalization and cleaning balance sheets, an aide said.
Though the United States is experiencing more robust growth than some European nations -- likely at 3.5 percent this year according to Federal Reserve figures Wednesday -- unemployment is high at around 10 percent.
Some 8.5 million US jobs were lost during the 2008-2009 recession, and analysts remain wary of the country`s economic rebound, and also fear the impact of the Eurozone crisis on future growth numbers.
Obama will also look to Asia, with meetings planned with five key regional leaders, including Chinese President Hu Jintao.
For months, Obama has complained in veiled terms about China`s monetary strategy that favors a weak yuan.
China has already eased summit tensions by saying it will let its currency trade more freely against the dollar.
The announcement was widely seen as a bid to head off an ugly spat at the G20 summit, amid mounting accusations from the United States and others that China`s currency policy gives its exporters an unfair advantage.
China however warned that its yuan exchange rate would be off-limits at the summit, and urged critics of its currency policy to stop "playing the blame game."
Obama, who since taking office in January 2009 has launched a massive 787 billion dollar stimulus program, will also quiz European leaders on their own economic problems and the debt crises in Greece, Spain and even in Britain.
The last time both the G8 and the G20 met "there was quite a bit of consensus," said Fariborz Ghadar, an analyst at the Center of Strategic and International Studies (CSIS) think tank in Washington.
"The economy of the world was in trouble and they all had to do something. They were going to stimulate it, so there was much more consensus than there is this time," he said.
Obama on Friday acknowledged the ballooning US debt, but warned against ending stimulus spending too quickly. The Obama administration especially fears a period of economic stagnation if the economy is not revived.
The US president on Tuesday said the economy was not growing as quickly as US officials would like to see. Earlier, Treasury Secretary Timothy Geithner said that the US economy was going through an especially difficult period.
"The Europeans would like very much to create a global bank levy to pay for future bank crises and bailouts," said Heather Conley, a Europe expert at the CSIS.
"That`s a no-go for the US, Canada and Japan," she said.
Treasury Secretary Timothy Geithner and White House economic advisor Lawrence Summers have been pressing G20 allies to take care of short-term economic growth before tackling long-standing budget shortfalls.
Facing the prospect of a double-dip recession in a mid-term election year, the White House had already urged European and other nations not to curb spending.
"Europe is in the mood for austerity and fiscal consolidation, understandably for its debt crisis. In fact, the Germans have sort of created a preemptive austerity plan, and that is causing some discord," said Conley.
Coordinating how countries exit their stimulus packages "will be very important," Conley said.
BDST:13:00 HRS, June 24, 2010
SIS/DC
