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| Canada tells Europe: help yourself before asking for money |
| 0ttawa, 15.04.2012 |
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| Canada maintains its stance and still refuses to put more money into the International Monetary Fund in order to create a backdoor bailout for Europe.
Despite the fact that Europe remains the biggest threat to the weak global economy, the Canadian prime minister doesn’t see the necessity to help the Eurozone with fresh money.
“Canada is not interested in contributing to a bailout fund for Europe,” Andrew MacDougall, spokesman for Prime Minister Stephen Harper, said on Thursday. He added that Europe’s debt crisis will be an issue in this weekend’s Summit of the Americas in Colombia, which Harper will attend.
Pull more money from your pockets
Finance Minister Jim Flaherty is also very reluctant to put more money to the International Monetary Fund (IMF) and he is critical of Eurozone governments. He claimed many times that Europeans haven’t done enough on their own to deserve international support.
“We think the primary role of the IMF is, and ought to be, supporting the poorer countries of the world, and those countries do not include European countries …which are among the wealthier countries in the world.” Flaherty said in Toronto at the end of March.
Flaherty, responding to the summit in Copenhagen where European finance ministers said they would limit fresh crisis lending to just about C$670-billion, stated that the new European financial rescue fund was insufficient.
The United States also not ready to lend any more money to Eurozone via the IMF. Emerging markets said they would help, but want a greater say in the running of the IMF in exchange for providing financial help to Europe. But Japan and China said they were ready to boost IMF funds.
Less target money
Meanwhile, Christine Lagarde, managing director of the IMF, said the fund will seek less money than the USD$600 billion originally earmarked. “Some of the dramas that were envisaged at the end of 2011, or very beginning of 2012, not only have not materialized, but some good news has actually restored a little bit of confidence,” Lagarde said at an event hosted by the Brookings Institution in Washington on Thursday.
She didn’t reveal the new target. Earlier this year, she said IMF would need an extra $500 billion to guard against the worst-case scenario of debt default by a big economy such as Italy or Spain.
European finance ministers have already promised €300 billion to Greece, Ireland and Portugal. The firewall against debt contagion now stands at €800 billion. Germany refused to provide more money to the permanent rescue fund. Many analysts think that even extra €500 billion will not be sufficient to rescue Spain or Italy.
by Jozef Rynik
WBP Online Correspondent in Ottawa
To contact the author of this story e-mail jozef.rynik@wbponline.com
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