The Group of Eight leaders raised the alarm on Thursday about government debts weighing down the world economy but pledged at a meeting in France to find funds to help new Arab democracies. As another Arab state, Yemen, appeared headed for civil war, leaders of the G8 - the seven Western powers, plus Russia - called on its president to join those of Egypt and Tunisia in stepping down.
A draft of Friday's final summit communique also contained strong censure of the Syrian and Libyan leaders. Russia, a post-Cold War addition to the traditional club of wealthy industrial nations, marked itself out by suggesting its partners asked it to mediate between them and Muammar Gaddafi, and by echoing the demands of other big developing economies for a bigger say in who will run the International Monetary Fund.
Summit host President Nicolas Sarkozy insisted that post, vacated by fellow Frenchman Dominique Strauss-Kahn after he was accused of attempted rape, should remain in European hands as Greece and other EU states seek IMF help with their debts. The EU candidate is Sarkozy's finance minister, Christine Lagarde.
GREEK CRISIS Briefing reporters, Japan's deputy chief cabinet secretary, Tetsuro Fukuyama, said the G8 agreed Greece must do more to sort out its finances and work with the IMF to solve its debt crisis. The Greek government has called emergency talks with the opposition for Friday as repayment deadlines loom and European officials have warned that aid could be withheld for a country where millions face many years of austerity at best.
Japan's Fukuyama said: "Many leaders pointed out that Europe's debt problem, the price hikes of oil, food and commodities, and the overheating of emerging economies are among factors that put downwards pressure on the global economy. "Especially on Greece's debt problem, many leaders expressed the view that it is important that Greece further works on its fiscal reform and it should work with the IMF on this issue."
A remark by one European diplomat that the US delegation led by President Barack Obama voiced concern that the euro could weaken and dent US exports, was denied by the French hosts. EU sources said European members of the G8 - Germany, France, Britain and Italy - as well as European Union officials would commit in a summit statement from the resort of Deauville to continue efforts to rein in the euro zone debt crisis.
However, the draft communique also called on the United States and Japan to make sure their own public finances were sustainable over the long term, another European diplomat said. One early draft obtained by Reuters featured such phrasing. Sarkozy told a news conference in the northern seaside resort:
"We were all pleased to see world growth resume, fairly strongly. We all were convinced that it was a good idea to reduce tensions and imbalances." He noted that France would host a summit in November of the wider Group of 20, which includes big developing economies including China and India and which has superseded the G8 as a forum for addressing global currency and trade concerns.
ARAB SPRING On Yemen, summit host France said president Saleh must end his 33-year rule. "We deplore the fighting that occurred overnight which was a direct result of the current political impasse, for which President Saleh has direct responsibility due to his refusal to sign the GCC transition agreement," a French foreign ministry spokesman said, referring to the Gulf Co-operation Council.
David Cameron, the British prime minister, said the summit would show Arabs on the street that the world stood behind them: "I want a very simple and clear message to come out of this summit, and that is that the most powerful nations on earth have come together and are saying to those in the Middle East and North Africa who want greater democracy, greater freedom, greater civil rights, 'We are on your side'."
"We will help you build your democracy, we will help your economies ... we will help you in all the ways we can, because the alternative to a successful democracy is more of the poisonous extremism that has done so much damage in our world." The G8 countries are expected to give details on Friday of the amount of financial aid they would offer to Tunisia and Egypt as they try to establish democratic rule. The intention is to hold out the prospect of aid to other states in the region.
Given the state of the world economy, the extent of the aid is likely to be modest. The European Union executive said it had added 1.24 billion euros of fresh grant funding to an existing programme that aims to help neighbours across the Mediterranean.
LIBYAN WAR Russia, a critic of Nato's military campaign in Libya, said on Thursday that its Western partners in the Group of Eight had asked it to take on a mediation role in resolving the crisis.
But it was not immediately clear whether Russia was offering to mediate with Gaddafi after President Dmitry Medvedev's spokeswoman said other leaders at the summit had asked him to. The Western powers engaged in a two-month-old bombing campaign in Libya rejected another cease-fire proposal from Tripoli on Thursday and reiterated the demand, echoed by Libya's rebels, that Gaddafi must stand aside before any truce.
Sarkozy held out the prospect to him, however, that he might possibly be able to stay in Libya: "We are not saying that Gaddafi needs to be exiled, that's not our problem," Sarkozy said. "When we say he must leave, he must leave power and the quicker he does it, the greater his choice."
Japanese Prime Minister Naoto Kan briefed the G8 on Tokyo's response to the nuclear crisis at Fukushima after the tsunami in March, part of a process of discussions aimed at improving the safety of nuclear power plants. Kan called for tighter global standards and better co-ordination among national regulators. German Chancellor Angela Merkel, for whom the future of nuclear power has been a vexed domestic political issue, said she saw "remarkable progress" in improving co-ordination. Merkel cancelled plans to extend the life of Germany's reactors after the disaster in Japan.
Among a range of matters discussed among the leaders outside the formal sessions, Obama told Medvedev that he wanted a rapid entry for Moscow into the World Trade Organisation. And Medvedev confirmed post-Soviet Russia's first big purchase of foreign arms - ordering four ships from a French-led consortium. Obama and Sarkozy led tributes to the Serbian government for its arrest of Bosnian Serb war crimes suspect Ratko Mladic. The French president called it "courageous" said it would bring former pariah Belgrade a step closer to integration with the EU.
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