G8 Summit: Focus on growth

U.S. President Barack Obama pledged to work with Europe on a package that balances growth with debt reduction Saturday at the G8 summit in the United States.

Balancing a growth agenda with efforts to lower government debt through fiscal belt tightening is a crucial part of the G8 discussions. At the wooded Camp David retreat in Maryland, President Obama the focus is on Europe and ways to soothe financial markets after worries about Spain's banking problems and the risk of a Greek exit from the euro zone.

British Prime Minister David Cameron said he detected a "growing sense of urgency that action needs to be taken" after news of Spain’s bad banking debts that could crash the euro zone's fourth largest economy. Earlier French President Francois Hollande suggested using European funds to inject capital into Spain's banks, which would mark a significant acceleration of EU rescue efforts.

Obama has aligned himself with Italy's Prime Minister Mario Monti and the new French president in putting more emphasis on growth. But that places pressure on German Chancellor Angela Merkel, who has pushed fiscal austerity as a the prime means of bringing down huge debt levels that are burdening European economies.

Also on the summit agenda are concerns about oil and food prices as well as Afghanistan, Iran, Syria and North Korea. Speculation has grown that Obama will use an energy session
at the G8 to seek support to tap emergency oil reserves before a European Union embargo of Iranian crude takes effect in July.

But with oil prices already sliding, a move by Obama to tap the Strategic Petroleum Reserve - alone or along with other countries - could expose him to criticism that the emergency
supply should only be touched in a supply crisis.