US & Canada

Obama welcomes G8 leaders at Camp David

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Media captionPresident Obama opened the G8 summit with a dinner for the world leaders

President Obama has welcomed world leaders to Camp David near Washington for the G8 summit, where the eurozone crisis is likely to dominate talks.

Investors fear a Greek eurozone exit could trigger a fresh global crisis.

At Friday's opening dinner Iran and North Korea's nuclear ambitions and Syrian unrest were discussed, with broad consensus, officials said.

North Korea faces further isolation, the G8 leaders agreed, if it "continues down the path of provocation".

On Iran, leaders agreed that the onus was on the government in Tehran to prove the claim that its nuclear programme was peaceful.

On Syria, a US official said the leaders, including Russia's Prime Minster Dmitry Medvedev, were in agreement that the UN-backed peace plan had yet to be fully implemented and that there was now a need to move towards a political transition.

None of these issues is simple, says the BBC's Steve Kingstone in Washington, but Friday evening was arguably the more straightforward part of the summit.

Earlier, Mr Obama and the new French President, Francois Hollande, made it clear that they wanted a focus on economic growth.

Mr Obama said that tackling the debt crisis in Europe was an issue of extraordinary importance.

'False' report

Greece said that German Chancellor Angela Merkel had suggested on Friday morning that the country could hold a referendum on whether to remain in the eurozone when it votes in national elections next month.

A statement from the office of Greece's interim prime minister said that Mrs Merkel had raised the subject during a telephone call with President Karolos Papoulias.

The German chancellor "conveyed thoughts about a vote parallel to the election with the question to what extent do the Greek citizens wish to remain within the eurozone", said the statement.

"However, it is clear that the matter is beyond the competence of the caretaker government."

However Berlin denied such a proposal had been made.

"This is false and we completely dismiss this," a German government spokeswoman said.

Greece's caretaker government was sworn in this week after elections failed to produce a viable coalition to run the country. New elections have been scheduled for 17 June.

The result of the poll could determine the fate of austerity measures which Greece's international creditors are insisting on.

Investors fear any refusal by Athens to impose deep spending cuts agreed under a bailout deal could result in the country quitting the bloc of 17 countries that use the euro.

Larger countries such as Spain or Italy that are struggling to ease their debt loads might then become vulnerable, potentially triggering wider eurozone upheaval and even a global financial crisis to rival the one of 2008.

'Decisive action' needed

The eurozone is expected to top the agenda when the leaders of the US, Germany, France, Britain, Japan, Russia, Italy and Canada hold a full day of talks on Saturday at their annual summit, at President Barack Obama's retreat near Washington DC.

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Media captionFrancois Hollande and Barack Obama have met for the first time at the White House

Iran's nuclear programme and Syria's crackdown on dissent are also expected to be discussed further.

On Friday, Mr Obama welcomed Francois Hollande to the White House to discuss economic matters.

The French president, who took office this month, said he and Mr Obama shared "the same conviction that Greece must remain in the eurozone".

Mr Obama said the situation was of great importance not only to Europe, but for the whole world.

The US president said he looked forward to "fruitful" discussions with other G8 leaders, with a strong focus on economic growth.

Mr Hollande also met British Prime Minister David Cameron at the British embassy in Washington.

Mr Cameron said that Greece must decide if it wanted to remain in the euro.

"We need decisive action from eurozone countries in terms of strengthening eurozone banks, in terms of a strong eurozone firewall and decisive action over Greece. That has to be done."

Meanwhile, there was another contradiction as European Union Trade Commissioner Karel De Gucht said the bloc's officials were working on contingency plans in case Greece left the eurozone.

He was contradicted by his own colleague, Economic Affairs Commissioner Olli Rehn, who said in a statement: "We are not working on the scenario of a Greek exit."

That however still does not rule out the possibility of contingency planning, says the BBC's Matthew Price in Brussels.

After the G8 summit ends on Saturday evening, most of the leaders will decamp to Chicago to join a larger group of international officials for a Nato summit on Sunday and Monday, at which Afghanistan is expected to be the main item on the agenda.