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G-20 Leaders Promise To Promote Economic Growth


This is MORNING EDITION, from NPR News. I'm Linda Wertheimer.


And I'm Renee Montagne.

Leaders of the world's biggest economies wrapped up a G-20 summit meeting in Mexico yesterday with a promise to work together to promote jobs and economic growth. The meeting comes amid signs of slowing growth in the U.S. and elsewhere.

Europe continues to be the biggest drag on the global economy. Leaders at the G-20 said they're determined to hold the eurozone together. How they will do that has to wait until another summit later this month.

NPR's Scott Horsley was traveling with the president, and filed this report.

SCOTT HORSLEY, BYLINE: European leaders were on the hot seat when they and other members of the G-20 countries gathered in Los Cabos this week. President Obama said after the meeting: Europe has the tools to solve its financial problems, and that European leaders have a growing sense of urgency.


PRESIDENT BARACK OBAMA: They understand the stakes. They understand why it's important for them to take bold and decisive action. And I'm confident that they can meet those tests.

HORSLEY: That's not to say it'll be easy. European countries might share a common currency, but each still has its own unique economy, its own culture of saving and spending, and its own independent government making decisions.

Mr. Obama says it's no small task trying to build consensus among 17 different legislatures.


OBAMA: That means that sometimes, even after they've conceived of approaches to deal with the crisis, they have to work through all the politics to get it done. And markets are a lot more impatient.

HORSLEY: Working out the details of a continent-wide economic policy is not something that's likely to happen in two weeks or even two months, Mr. Obama says. But he argues European leaders could reassure nervous markets if they were at least able to sketch out a roadmap for where they want to go.


OBAMA: Even if they can't achieve all of it in one fell swoop, I think if people have a sense of where they're going, that can provide confidence and break the fever.

HORSLEY: European leaders might develop such a roadmap when they meet in Brussels later this month. They offered a few hints of the map at the G-20 meeting, where their host, Mexican President Felipe Calderon, said one priority is a more integrated European banking system. That would include uniform bank supervision and some kind of FDIC-style insurance to prevent bank runs. Calderon's speaking here through an interpreter.


PRESIDENT FELIPE CALDERON: (Through translator) If one had to summarize the attitude and the thought and the will that prevailed in the G-20 discussions, it is that the Europeans and we in their support want not less, but more Europe - not less integration, but more integration.

HORSLEY: Even as they try to knit their economies more closely together, world leaders are also investing in firewalls, in hopes of preventing one country's problems from spreading.

The International Monetary Fund now has hundreds of billions of dollars it can use to douse financial fires, thanks in part to contributions from Japan, Germany and China.

While the United States has not increased its own funding for the IMF, Mr. Obama insists the U.S. is invested in a European turnaround.


OBAMA: Slower growth in Europe means slower growth in American jobs. So we have a profound interest in seeing Europe prosper.

HORSLEY: While Europe's financial woes are getting most of the attention, developing countries like China and Brazil are also experiencing slower growth. And hiring here in the United States has fallen in each of the last three months.

G-20 leaders called for collective action to boost growth. Mr. Obama renewed his call for Congress to pass his jobs plan, including stepped up spending on public works projects and money to help local governments keep teachers and firefighters on the payroll.


OBAMA: Given that we don't have full control over what happens in Europe, or the pace at which things happen in Europe, you know, let's make sure that we're doing those things we do have control over and that are good policy, anyway.

HORSLEY: The United States also pledged to the G-20 to avoid going off the so-called fiscal cliff, with automatic tax hikes and deep spending cuts next year. Avoiding that cliff will require a compromise that so far has eluded Mr. Obama and his own fractious legislature.

Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.