President Obama is hosting leaders of the Group of Eight economies at Camp David in Maryland, where Europe's spiraling debt crisis is expected to be the top topic of conversation. European officials are working on emergency plans for Greece's possible exit from the euro currency, a development that could unleash chaos in global markets and stall America's fragile economic recovery. The White House views the crisis, and its potential impact on the U.S., as one of the biggest challenges facing Obama's re-election bid. The president is expected to wield as much influence as he can in encouraging Germany, Europe's biggest economy, to ease up on harsh austerity policies that have deepened the recession in Greece and encouraged the country to flirt with a euro exit. Can Obama avert European disaster?
Obama's influence has its limits: Obama "will find his diplomatic clout tested" at the G-8 summit, says Ben Feller of The Associated Press. Obama can "prod Europe toward more growth and less budget-slashing austerity," but the U.S. "is not in the lead of that fight," and can't back up its pressure with financial aid. Obama has "home field advantage," and the summit is his "best chance to hold sway with" Germany, but don't expect any game-changing breakthroughs.
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