Leading article: The most important G8 summit for three decades

The central drama is in Europe, but a special responsibility falls on Mr Obama’s shoulders

Related Topics

Not to put too fine a point on it, past meetings of the leaders of the West's major economic powers have all too often been a waste of time. But the G8 gathering that opened yesterday at the presidential retreat of Camp David, and then segues into Sunday and Monday's Nato summit in Chicago, is an exception. Indeed, it may be the most important since the very first of its kind took place at Rambouillet in 1975.

The Camp David talks will be dominated by the euro crisis, while Nato will focus on speeding an exit from the 11-year-old war in Afghanistan. In Chicago, demonstrations are likely, ostensibly against the war, but in reality driven by motives akin to those behind the protests in the streets and at the ballot box in European countries buffeted by the euro storm. There is a pervasive sense that, everywhere, politicians are failing the people. The US-led system whose uncurbed excesses produced the past four years of financial turmoil and economic misery is also the one that has been unable to extricate itself from the ever-more unpopular Afghan conflict even as it watches impotently as a tyrant in Syria wages war on his own people.

Of these challenges for the West, the most pressing is the euro, whose demise in its present configuration may be only months, if not weeks, away, if nothing is done. If Greece withdraws, as may yet happen, it would be proof that euro membership is not eternal, and pressure would switch to the far larger economies of Spain and Italy.

At that point, Europe would be staring at the collapse of its most ambitious project, with consequences, economic and political, immediate and longer term, that are impossible to foresee. And in an interconnected global economy, everyone would be affected. The US is at risk, despite its banks and corporations reducing their exposure to the eurozone, and the advantage stemming from the dollar's role as the main reserve currency. Calamity in Europe might well send the stuttering US economy back into recession. And for President Obama, the timing could not be worse as he fights to win a second term in what is already likely to be a close election in November.

No one expects these four days of summitry to serve as a magic wand. Great problems are not solved by communiqués. What is to be expected, however, is a determination to deal with the crisis, and a broad consensus on how. The central drama is playing out in Europe, but, as host of the meetings and leader of the world's largest economy, a special responsibility falls on Mr Obama's shoulders.

First and foremost, he must argue that the issue is not a black-and-white choice, between "one-size-fits-all" austerity and pumping vast amounts of cheap money into already highly indebted economies.

In each country, the solution will be different. Germany, for instance, must boost consumer spending and imports, even – horror of horrors – at the price of higher inflation. Meanwhile, the profligate southern Europeans have to cut back their bloated and unaffordable public sectors, while simultaneously taking measures to boost growth.

The problem lies in buying time to square this circle. Europe's tangled history has thus far ruled out the political union that should have underpinned its leap to a currency union. If the euro is to be saved, there will have to be an ad-hoc union, most likely in the shape of new "euro bonds" guaranteed by all, including Germany.

We can but hope that the wooded tranquillity of Camp David concentrates minds on the problems at hand. The world, and history, will not wait.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Hydrographic Survey Manager

£40000 - £50000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Structural Engineer

Competitive: The Green Recruitment Company: Job Title: Structural Engineer Job...

Learning & Development Advisor - North & Scotland - £26,000

£26000 - £27000 per annum + car, pension: Ashdown Group: Learning & Developmen...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Day In a Page

Read Next
James Foley was captured in November 2012 by Isis militants  

Voices in Danger: Syria is the most dangerous country in the world for journalists

Anne Mortensen
Texas Gov. Rick Perry might try to run for president again in 2016  

Rick Perry could end up in jail for the rest of his life — so why does he look so smug?

David Usborne
Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape