G8: New Friends, Old Rivals

As the Group of Eight rich nations meets in Heilegendamm, Germany, the stakes appear higher -- and more complicated -- for the U.S. than in recent years.

A Level Playing Field

The once-sluggish economies of Germany and France are revving up and the pace of growth in the European Union is expected to surpass that of the U.S., where the economic expansion is now six years old.  Meanwhile, Chinese growth shows no signs of slowing from its projected 11% rate. And Russia, flush with money from its crude oil and natural gas industries, is in a position to flex some muscle, raising the spectre of security concerns for the first time since the Iron Curtain fell.

German Chancellor Angela Merkel with President of the Russian Republic Vladimir Putin and U.S. President George Bush

All of this has created an interesting and dynamic backdrop to the official agenda of the G-8 conference, which is “to foster consensus on global issues,” enable trade, address climate change, fight pandemics including AIDS and seek answers to Africa’s ills. Nonetheless, they are issues now in the forefront of many participants’ minds.

The United State's position as the sole superpower seems less assured, if not tenuous, as the European Union super-bloc, China and Russia each pose their own challenges to America’s preeminence.

Vladimir Putin, president of the Russian Republic – and former KGB lieutenant-colonel – has invoked nationalistic pride and wielded power in ways many call reminiscent of the Cold War. After predecessor Boris Yeltsin presided over social chaos and economic malaise, Putin has appealed to order-hungry Russians, clamping down on press freedoms and seizing control of industries such as vital oil and natural-gas entities.

Going into the summit, a verbal skirmish erupted between Putin and U.S. President George W. Bush over a proposed U.S. missile shield in eastern  Europe. Observers wondered if the Kremlin, traditional bogeyman of the Western world, will again pose a threat to democratic Europe – and America.

Both governments have since downplayed the missile shield disagreement, most recently with Putin Thursday reportedly suggesting a joint missile radar base in Azerbaijan, a former Soviet republic in central Asia, as a way of resolving the issue. Trish Regan reports from the summit.

Russia: No Iron Fist

Demetri Sevastopulo, Washington correspondent for the Financial Times, told CNBC’s Morning Call that Putin is merely saber-rattling to send the U.S. – and Central Europeans -- a message: “Ten years ago, Russia was a poorer country… Now, they have a lot of cash, thanks to energy resources. ‘We’re a big power again.’” Gerald Seib, Washington bureau chief at The Wall Street Journal, agreed: “We’re a long way from the Cold War – there is no ‘Russian Empire,’ and the Russians are in the global economy now.” He also predicts that the Kremlin will seek greater economic cooperation with the U.S. -- in order to compete with China and India.