Obama, Merkel begin talks in US

US president Barack Obama and German chancellor Angela Merkel began to air differences over fiscal policy, the euro zone crisis…

US president Barack Obama and German chancellor Angela Merkel began to air differences over fiscal policy, the euro zone crisis and the war in Libya today while emphasizing the strength of their alliance.

Mr Obama welcomed Ms Merkel at a formal ceremony on the White House lawn with cannon shots and military musicians adding to the pomp and circumstance of an official visit - the first visit by a European leader under Mr Obama's presidency.

"This visit reaffirms an enduring truth: our alliances with nations like Germany are more important than ever," he said with the German Chancellor standing at his side. "Indeed they are indispensable to global security and prosperity."

"Europe and Germany have no better partner than America," Ms Merkel said in English, drawing applause.

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The show of partnership did not mask differences that the two leaders have over economic and security issues.

Mr Obama favoured more government stimulus spending during the global economic crisis while Ms Merkel pressed for fiscal austerity. The United States cautiously endorsed military action in Libya while Germany confounded its Nato partners by refusing to take part.

Those issues and the euro zone debt crisis were expected to dominate talks between the leaders and their advisers.

Mr Obama has cited the crisis as one in a handful of foreign "headwinds" affecting the US economy.

But as Greece started a campaign to secure a new international bailout, the Obama administration made clear it expects Europe and, by default, wealthy Germany, to take care of the problem.

Washington faces a debt challenge too, and Ms Merkel could rebuff Mr Obama's calls about Greece by saying the United States must get its own fiscal problems under control.

The White House is leading talks with Republican and Democratic lawmakers to try to agree a deal on long-term deficit reduction.

Ms Merkel also is expected to emphasise Europe's support for French finance minister Christine Lagarde's candidacy to replace Dominique Strauss-Kahn as IMF chief.

The United States has not offered public support for Ms Lagarde, saying instead it wants to see the best candidate get the job - a nod to developing countries, who object to Europe's traditional hold on the position.

Mr Obama will present Ms Merkel with the Medal of Freedom - the highest US civilian award - during her visit.

He said in an interview with a German newspaper that the two leaders would not always see eye to eye.

"We don't always agree on everything; no two allies do," the president told Der Tagesspiegel. "But in our meetings and discussions, we always speak honestly and openly, as close friends should, and I believe that our approach to shared challenges is stronger because of it."

Agencies