HUNTSVILLE, Ontario – Fresh from a congressional win on a financial overhaul, President Barack Obama pressed world leaders on Friday to join him in backing stronger rules against banking abuses.
He made little headway in his call for more stimulus to keep the world economy growing. Instead, he ran into strong opposition from countries wanting to put deficit reduction first.
As Obama and other leaders sparred over how to keep their economies from slipping back into recession, there was little expectation of economic breakthroughs from sessions here and in Toronto.
Divided on economic remedies, the leaders searched for common ground on other issues, such as confronting nuclear standoffs with Iran and North Korea, dealing with the AIDS epidemic, and maternal and infant health care in desperately poor countries – a key project of Canadian Prime Minister Stephen Harper.
Harper announced late Friday that leaders of the so-called Group of Eight major industrial democracies – the U.S., Canada, Britain, Germany, France, Japan, Italy and Russia – had pledged to contribute $5billion over the next five years to the initiative.
He said Canada’s contribution was $1.1billion. The White House said that the U.S. commitment would total $1.35billion over two years, with that support subject to congressional approval. Japan pledged $500million over a five-year period.
The eight-nation group met at a resort in Canada’s sprawling Muskoka region of lakes and vacation cottages several hours’ drive north of Toronto. Today and Sunday, the focus shifts to Toronto, where their number will grow to 20 as they are joined by leaders representing fast-growing developing economies including China, India and Brazil.
The Group of 20 has been gradually overshadowing the Group of Eight as the world’s premier forum for discussing and coordinating economic policy.
Obama’s call for more temporary stimulus spending was being rebuffed by leaders in Europe and Japan who instead emphasized cutting government spending and even raising taxes, much as he’s been stymied at home on his pleas to Congress for more jobs and stimulus money.
After showing strong solidarity during the height of the financial crisis, the leaders are divided now over whether to stimulate economic growth with more spending – as Obama wants – or to rein in budget deficits in light of debt crises in Greece and other heavily indebted nations.
In Toronto, hundreds of protesters vowing to set up a tent city near the summit security zone moved through city streets. Police in riot gear appeared to be holding them back and were making few arrests.
The leaders were giving special attention this year to some unmet pledges from the past; namely, the G-8’s vow five years ago to double international aid to Africa by 2010 and to make significant strides in providing AIDS treatment to all who need it. Neither goal has been achieved.