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Harper to Eurozone: Stimulus alone won't save you

Bryn Weese, Senior Washington Correspondent, QMI Agency
Stephen Harper at Camp David, May 19, 2012.

Stephen Harper at Camp David, May 19, 2012.

World leaders emerged from the isolation of Camp David on Saturday confident the Eurozone financial crisis can, and will, be solved.

But Prime Minister Stephen Harper reminded his G8 colleagues - some of whom are pushing for heavy stimulus spending to cure what ails the 17-nation European Union - that "fiscal discipline" is "absolutely necessary," too.

"Fiscal discipline and economic growth go hand-in-hand, and I think the declarations here recognize that, and all of our discussions recognize that," Harper said following Saturday's summit at U.S. President Barack Obama's secluded Maryland retreat.

"Fiscal discipline is not sufficient for economic growth, but it is absolutely necessary. We will not emerge from what is now a debt-driven crisis unless that issue is addressed."

Another milestone for the world's eight most powerful economies - including Russia - is that they all agreed Iran must be more transparent about its nuclear ambitions, and that it's time for a political transition in Syria.

Russia has been a hurdle in international efforts to condemn Syrian President Bashar al-Assad's regime, which has killed thousands of its own civilians who want a new government.

All day Saturday, the leaders of Canada, the U.S., France, Britain, Italy, Germany, Japan and Russia, gathered at Camp David to talk global economy and food security in Africa.

Obama said afterwards the meetings had been a success and that "genuine progress" had been achieved, including consensus that Greece should stay in the Eurozone, which teeters on the brink of financial ruin.

"We agreed upon the importance of a strong and cohesive Eurozone and affirmed our interest in Greece staying in the Eurozone while respecting its commitments," he said.

He added he's confident a solution will be found for Europe's debt crisis,in part because the U.S. faced a similar crisis nearly four years ago.

"Europe's situation, of course, is more complicated," he said. "When they want to decide on a way to move forward, there are 17 countries in the Eurozone that need to come to an agreement."

Prior to Saturday's meetings, Harper met privately with France's newly elected president Francois Hollande, a socialist who campaigned on promises to jack income taxes on France's wealthiest to 75%, and also to put the brakes on government spending cuts.

It was the two leaders' first bilateral meeting, and according to Harper's office, they spoke about the ongoing Canada-European Union free-trade deal talks, as well as the economy.

On Sunday and Monday, many of the G8 leaders will be in Chicago for the 25th NATO summit, the third ever in the U.S. and the first outside the capital. There are reportedly 3,100 police officers in Chicago for the summit.

Three people were arrested Saturday for plotting to throw incendiary bombs at Obama's re-election headquarters, the mayor's house and police. Thousands more are expected to ramp up protests Sunday once the NATO summit begins.

The summit¹s focus is almost exclusively the war in Afghanistan and, in particular, how to end it in 2014.

The Chicago meeting kicks off with a visit from Afghan President Hamid Karzai. Later, talks will focus on how to transition that country's security from NATO to Afghan forces next year, and how to safely pull out all NATO troops from the war-torn country a year later in 2014.