Obama presses ailing Europe to focus on growth

A growing chorus of world leaders on Friday pushed for a shift toward more pro-growth policies to help ease a European crisis that threatens to oust Greece from the euro zone and reverberate throughout the global economy.

Setting the tone for a weekend G8 summit, US President Barack Obama aligned himself with the new French president's drive for more economic stimulus in recession-plagued Europe, in a swipe at the tough austerity programs that have been spearheaded by German Chancellor Angela Merkel.

Obama's stance reflects his worries that the euro zone contagion, which threatens the future of Europe's 17-nation single currency, could hurt the fragile U.S. economic recovery and his own re-election chances in November.

The Camp David summit kicked off four days of intensive diplomacy - including a NATO meeting in Obama's home town of Chicago - that will test leaders' ability to quell unease over the threat of another financial meltdown as well as plans to wind down the unpopular war in Afghanistan.

After White House talks with French President Francois Hollande, Obama said the two agreed that tackling the euro-zone crisis was "an issue of extraordinary importance, not only to the people of Europe, but also to the world economy."

"We're looking forward to a fruitful discussion later this evening and tomorrow with the other G8 leaders about how we can manage a responsible approach to fiscal consolidation that is coupled with a strong growth agenda," Obama said before flying to Camp David and greeting fellow leaders for an opening dinner.

Merkel, who has insisted on the need for tough fiscal discipline to bring down suffocating debt levels even as angry voters have toppled some euro zone governments, seemed certain to find herself increasingly alone.

As Obama welcomed his guests one-by-one outside a rustic lodge at the presidential retreat in Maryland, he asked Merkel: "How have you been?"

She shrugged and offered a strained smile. "Well, you have a few things on your mind," he said in a brief exchange captured by a boom microphone.

Her predicament could be underscored in the summit's final communique that, according to a draft shown to Reuters, will stress "our imperative to create growth and jobs."