Faced with differences between Europe and the U.S., and among European governments over the crisis response, the eight leading industrial economies concurred at President Barack Obama’s retreat outside Washington “that the right measures are not the same for each of us.”

“We agree on the importance of a strong and cohesive euro zone for global stability and recovery, and we affirm our interest in Greece remaining in the euro zone while respecting its commitments,” according to a G-8 statement Saturday.

German Chancellor Angela Merkel was on the spot at the Camp David summit as she faced growing pressure to shift her austerity-first approach after three years of a prolonged crisis that is roiling markets.

French President Francois Hollande, making his summit debut three days after being inaugurated, found an ally in Obama for his resistance to the German-led drive for balanced budget and debt reduction, which have set off a political and popular revolt against austerity in Greece.

“The direction the debate has taken recently should give us confidence,” Obama told reporters at Camp David. “Europe has taken significant steps to manage the crisis. And there’s now an emerging consensus that more must be done to promote growth and job creation right now in the context of these fiscal and structural reforms.”

Merkel’s Discontent

Merkel, whose crisis policy has helped keep her Germany’s most popular politician ahead of elections next year, sought to draw a line in the sand. Referring to public spending to counter the financial crisis that broke out in 2008, she said “everyone agreed that these kinds of stimulus program can’t be repeated right now.”

Curbing public deficits and boosting growth “are two sides of the same coin” and “shouldn’t be played off against each other,” she said. Hollande, France’s first socialist president in 17 years, said he put forward France’s objective to put growth “at the heart” of the discussions.

The real question is “whether the markets will continue to fund these peripheral European nations’ budget deficits,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, said in an e-mail. “Forget about Greece. If global bond market investors stop buying Spanish and Italian debt, it could be the trigger of a second worldwide recession.”

‘Unshackle’ ECB

European policy makers should “unshackle” the European Central Bank “to do quantitative easing like the Federal Reserve” to sidestep the limitations of bailouts and firewalls funded by the euro area’s strongest economies, Rupkey said.

The threat of a Greek exit from the 17-nation euro economy loomed over a gathering of some of the world’s most influential leaders discussing ways out of the revived debt crisis that has blunted world growth.

Almost $4 trillion was wiped from global equity markets this month amid speculation that Greece will exit the euro, and recession and loan losses led Moody’s Investors Services to downgrade 16 Spanish banks on May 17.

Spain’s 10-year bond yield rose 24 basis points this week to 6.25 percent, after surging above 6.50 percent for the first time since Nov. 29. Italian 10-year yields climbed for a second week, rising 28 basis points to 5.78 percent.

Greek Exit

The euro area is on the verge of losing one of its members, with more than 50 percent of investors predicting an exit this year as Greece’s election impasse threatens to push the debt crisis to new depths, according to a May 10 Bloomberg Global Poll of 1,253 investors, analysts and traders.

Merkel revealed her state of mind when Obama welcomed her on May 10. When the president asked her “How’ve you been?” the German chancellor, under pressure at home to appear tough against the Greeks, simply shrugged.

“Well, you have a few things on your mind,” Obama said.

“As expected, the G-8 led to little concrete measures on how to stimulate growth, particularly in Europe,” said Thomas Costerg, an economist at Standard Chartered Bank in London. “Major governments and central banks are a bit in a wait-and- see mode at the moment; but financial markets are not.”

European policy makers will meet informally on Wednesday, yet decisions are unlikely before a June summit, which is “a light-year for markets,” Costerg said. Italian Prime Minister Mario Monti said he will meet next month with his German and French counterparts in Rome ahead of the EU summit.

International Lobbying

“It’s not necessary for G-8 leaders to agree on what the relative burdens of austerity and stimulus are but if what we want is to avoid another Lehman-panic scenario, then it’s imperative the next election in Greece ends in a vote that reaffirms its commitment to remain in the eurozone,” said Tim Condon, chief Asia economist at ING Financial Markets in Singapore, referring to the collapse of Lehman Brothers Holdings Inc. in 2008. “What’s lacking in the world economy is more monetary stimulus but that’s not something the political leaders can deliver.”

The chairman and chief executive of Russia’s OAO Sberbank said yesterday that the G-8 leaders should abandon the effort to keep Greece in a system beyond its means.

There is “zero chance” that Greece will remain in the euro and trying to block that transition is only “torture” for the country, said German Gref, speaking to reporters in Washington. “What we see now, this is a horror without end.”

The G-8 includes the U.S., Canada, the U.K., Germany, France, Italy, Japan and Russia. The EU also has two seats.