Europe faces hard search to expand

Associated Press

WASHINGTON

On paper at least, European leaders agree: They need stronger growth measures to help their economies expand out of their 21/2-year-old government debt crisis. Figuring out exactly what those new steps might be will be the hard part.

Under urging from U.S. President Barack Obama and French President Francoise Hollande at the Group of Eight summit, German Chancellor Angela Merkel signed onto a statement that called for mixing painful cutbacks with growth-promoting measures to deal with a crisis that threatens the global economy.

The leaders warned that budget deficits have to come down. But they also acknowledged that an approach that’s based mostly on austerity and long-term reforms can’t help countries out of recessions this year or next. That’s the approach that has dominated the continent’s German-led attack on the crisis since it erupted in late 2009, when Greece admitted its finances were broken.