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Posted at 06:59 AM ET, 11/03/2011

Obama, French President Sarkozy open G20 summit

updated 9:30 a.m.

CANNES, France — President Obama arrived in this resort city Thursday and met with French President Nicolas Sarkozy to open the Group of 20 summit, amid mounting uncertainty over a possible Greek bailout referendum and European economic stability.

Obama tried to keep the mood light heading into the bilateral conference with Sarkozy at the Espace Riviera. “I was hoping to come and see some movies,” he quipped, a reference to the famous Cannes international film festival. He also congratulated Sarzkozy on the recent birth of a daughter, joking that he was confident the baby inherited the physical traits of mother, former model Carla Bruni.

There was little to laugh about on the economic front, however, after Greek Prime Minister George Papandreou shocked European leaders this week by calling for the referendum, which scuttled a carefully negotiated European bailout plan announced just days before.

European leaders have since announced they will suspend aid to Greece pending the referendum, even as growing opposition within Greece to Papandreou’s proposal raises the possibility that the popular vote may never take place.

“The most important aspect of our task over the next two days is to resolve the financial crisis here in Europe,” said Obama, who also met separately with German Chancellor Angel Merkel. “Here at the G-20 we’re going to have to flesh out details about how the plan will be fully and decisively implemented.”

WATCH: Obama at G-20 Summit

The stakes are high, as Greece’s spiraling debt problems have spread to Italy, Portugal and elsewhere. The Obama administration has tried to keep pressure on the Greeks and the rest of the European Union to implement the stabilization package, which calls for a reserve fund of $1 trillion to help cash-strapped nations and a recapitalization of major banks by $150 billion.

Along with Obama, Treasury Secretary Timothy Geithner, deputy national security adviser for international economic affairs Michael Froman, Treasury undersecretary for international affairs Lael Brainard and White House Chief of Staff William Daley were among the U.S. attendees at meeting with Sarkozy. French Foreign minister Alain Juppe and Finance minister Francois Baroin were on the French side.

White House officials said the president emphasized in the meetings with Sarkozy and Merkel that Europe should move forward as quickly as possible with the stabilization plan agreed to last week, regardless of the political uncertainty in Greece. The Greek bailout portion of the stabilization plan can be put on hold until after the referendum, officials said.

“The steps needed to be taken are clear irrespective of the political personalities or situaton at any given moment,” Ben Rhodes, the deputy national security adviser for strategic communications, told reporters in a briefing. “What needs to be done as relates to Greece and the stabilization of the euro zone was outlined last week.”

Yet Obama, facing his own economic problems at home, has few resources at his disposal to use as leverage, with the United States unlikely to offer significant financial assistance for the bailout.

Instead, Obama has been offering his European counterparts advice gleaned during his response to the U.S. recession two years ago.

“The U.S. and this administration acted with overwhelming force and put up the necessary resources to deal with the crisis--we insisted on robust stress tests, financial institutions dramatically increased by double their capital,” Froman said. “One thing we can contribute is our experience and ideas moving forward and support in doing so.”

After his bilateral meetings, the president took part in a gathering of the L-20, a collection of top labor leaders, before heading into a formal round of G-20 meetings Thursday afternoon.

Analysts said the president could have a difficult time rallying support for a common agenda, considering that the U.S. has offered a muddled message so far.

“On the one hand, you have both the president and Secretary Geithner saying, we have full confidence Europe can handle this issue; they have the resources; we know they can do it. And then you waffle back and [they are saying] Europe is scaring the world; get your act together,” said Heather Conley, director of the European program at the Center for Strategic and International Studies.

“Secretary Geithner has repeated visits to Europe . . . [but] European finance ministers have not been fully appreciative of U.S. advice and counsel on how to deal with the European crisis because of U.S. domestic challenges,” Conley added. “So it’s a point where we’re not seeing that coalescing of leadership to resolve the issue. We’re starting to see where tensions and nervousness are rising.”

By  |  06:59 AM ET, 11/03/2011

 
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