Obama Says G8 Summit To Discuss 'Strong Growth Agenda'

U.S. President Barack Obama said he and French President Francois Hollande agreed that the eurozone crisis is of extraordinary importance to the world economy.

U.S. President Barack Obama says the Group of Eight (G8) summit will discuss how to combine a "strong growth agenda" with efforts to manage the eurozone's fiscal crisis.

Obama made the statement hours before opening the summit at Camp David, after talks with French President Francois Hollande at the White House.

"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.

Obama said he and Hollande agreed that the eurozone crisis is of extraordinary importance to the world economy. Hollande also renewed his calls for a new emphasis on economic growth policies.

The new French president said during the meeting with Obama that Greece, which is at the center of the eurozone crisis, should not abandon the common currency, the euro.

"We share the same conviction that Greece must stay in the eurozone and that every effort must be made by all parties to that effect," Hollande said.

French Afghan Pullout?

Hollande, who took office this week following his victory over conservative Nicolas Sarkozy, said that he had reminded Obama about his campaign pledge to pull French troops out of Afghanistan by the end of 2012.

However, he said France "will continue to provide support to Afghanistan, of a different nature and in a different way, and that it will be done in agreement with our allies," but did not elaborate.

Hollande campaigned on a pledge to withdraw the 3,300 French troops from Afghanistan ahead of schedule.

His comment however indicated a compromise could be possible to shift French troops away from combat roles but still keep a French presence in Afghanistan.

Obama reiterated the need for sustained support for Afghanistan, which is due to top the agenda of a NATO summit in Chicago on May 20-21.

"We agreed that even as we transition out of a combat phase in Afghanistan, it is important that we sustain our commitment to helping Afghans build security and continue down the path of development," Obama said.

Euro Crisis Dominates

Later on May 18, Obama and Hollande will join other world leaders at Camp David, the presidential retreat north of Washington.

The G8 comprises the United States, Britain, Canada, France, Germany, Italy, Japan, and Russia.

Recently installed Russian Prime Minister Dmitry Medvedev will attend for Moscow in place of President Vladimir Putin.

The eurozone crisis will figure high on the agenda of the summit as the euro hit another four-month low against the dollar on May 18, amid the Greek debt crisis and problems in Spanish banks -- 16 of which were downgraded by Moody's ratings agency.

Another ratings agency, Fitch, lowered its ratings of Greek banks on May 18 in the wake of its cut of the country's sovereign rating a day earlier.

In a related development, German Chancellor Angela Merkel's office has denied a report that she had suggested Greece hold a referendum on its euro membership alongside repeat elections on June 17.

The Greek prime minister's office had earlier said Merkel aired the proposal during a phone talk with President Carolos Papoulias on May 18.

But a German government spokesman later said, "This is false and we completely dismiss this."

Repeat elections were called after a previous early poll this month left no party with enough votes to form a government.

The new vote could result in a government that would refuse to implement the austerity measures that Greece's government has to fulfill in exchange for a bailout Athens needs to avoid bankruptcy.

With reporting by Reuters, AP, and AFP