Europe snaps back at Harper over lecture on debt crisis


mentalfloss
#1
Europe snaps back at Harper over lecture on debt crisis

LOS CABOS, Mexico — Prime Minister Stephen Harper issued a stern challenge to Europe Monday to pull itself out of its debt crisis with its own funds and to overhaul the eurozone with structural changes that create a "genuine" financial union.

But Canada's position on the issue was sharply criticized by European Commission President Jose Manuel Barroso, who suggested the world should be contributing funds to help Europe and defiantly insisted that the continent would not take "lessons" from others about how to run an economy.

The tense standoff — which emerged in separate news conferences about an hour apart — occurred as leaders of the G20 nations began a two-day summit here dominated by the continuing economic crisis in Europe.

The leaders of the world's strongest economies met in the wake of a tense election campaign in Greece, won by the pro-bailout conservative New Democracy party — an outcome that has gone some way to reassuring the rest of Europe that the country will move forward to negotiate the terms of a bailout package and ultimately stay in the euro currency.

"We are obviously very pleased that the Greek people have given a clear mandate to remain in the eurozone and to fulfil the commitments they have made within the eurozone," Harper told journalists.

"We think that's a very positive development going forward."

Nonetheless, he said the 17-nation eurozone still has "significant" problems.

"The various debt crises, the combination of banking and sovereign debt crises, remain very severe."

At the oceanside gathering, Harper is under pressure to pledge Canadian assistance to a $430-billion International Monetary Fund (IMF) bailout package that would help troubled economies in Europe.

But Canada and the United States are digging in their heels and saying no to the request from the IMF — arguing Europe is a rich continent and it needs to put a substantive game plan in place to fix its debt crisis.

Harper said the continent's debt problems are "clearly within the means of European countries to deal with.

"What European countries need to do, and what we will be looking to see, are clear commitments that they are prepared to take all of the necessary actions that are within their capacity to deal with these problems.

"And to create the structural changes necessary to create a genuine financial union in Europe that can deal with these problems on an ongoing basis."

Barroso reacted strongly to Harper's contention that Europe has the financial firepower to deal with its own crisis.

He said Europe is already the biggest contributor to the IMF for its programs — "bigger than the United States, certainly much, much, much bigger than Canada."


Even in this crisis, he said, Europe is contributing the largest share to the IMF rescue fund. He suggested that it would be wise for nations elsewhere to do likewise because it ultimately is in their own economic self-interest.

In a pointed reminder, he noted that Canada is trying to complete a free-trade agreement with Europe.

"Why? Because all the other parts of the world look at Europe as a source of possible growth for them. And, in fact, they also have an interest. The sooner the situation is stabilized in Europe, the better for them.


"So that's why my position and the position of the European Union has been to say, let's work co-operatively for this. Let's work together."


Barroso lashed back at those who would lecture Europe, saying that in fact the global economic crisis of 2008 began in North American due to some "unorthodox" practices by the financial sector.

In recent months, Harper and others have called on Europe to stop dragging its heels and put in place a comprehensive plan of action more quickly.

Barroso chafed at such criticism, suggesting it's not so easy, and noting that while not all G20 nations are democracies, all of the European countries are run by democratic politicians who seek consensus.

"Sometimes this means taking more time," he said.

"But, frankly, we are not coming here to receive lessons in terms of democracy and in terms of how to run an economy because the European Union has a model that we may be very proud of. We are not complacent about the difficulties.

"We are extremely open. I wish that all our partners were so open about their own difficulties. We are extremely open and we are engaging our partners but we are certainly not coming here to receive lessons from nobody."

At the summit, Harper is urging other nations to adopt two principles: fiscal discipline to reduce deficits, and innovative policies to create economic growth.

As part of that latter priority, Harper has touted Canada's trade agenda as a critical objective. He has noted that his government has struck deals with many nations, is in talks with the EU and India, and is hoping to be invited to the negotiating table for a massive new trading bloc — the Trans-Pacific Partnership (TPP).

The TPP is currently an Asia-Pacific free-trade proposal being negotiated among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

In addition to Canada, two other major countries — Japan and Mexico — have signalled they want in on the talks.


That can't happen unless they are invited by the other nine nations to join, and some have resisted Canada's participation unless it first agrees to abandon its supply management system that protects dairy and poultry farmers — a concession that Harper has refused to make just to get to the negotiating table.


In recent days, there have been indications that progress had been made and that Harper was on the verge of announcing — possibly at the end of the G20 summit — that Canada has been given the green light to enter TPP negotiations.

On Monday, Mexico announced that it had received that status and will join the talks.

At his news conference, Harper avoided answering a direct question on whether Canada will soon enter the TPP negotiations.

"An important part of our agenda for growth is an ambitious trade agenda," he said.

"We're delighted that Americans and others have indicated an interest in seeing Canada join the Trans-Pacific Partnership. I think for now I'll just leave it at that."

Europe snaps back at Harper over lecture on debt crisis
 
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captain morgan
Bloc Québécois
+5
#2  Top Rated Post
I find this quote quite telling:

"Manuel Barroso, who suggested the world should be contributing funds to help Europe and defiantly insisted that the continent would not take "lessons" from others about how to run an economy. "

It appears that the only lesson that they've learned is that it's easier to demand bail-out money than it is to actually address the specific problems.
 
IdRatherBeSkiing
+2
#3
Quote: Originally Posted by captain morgan View Post

I find this quote quite telling:

"Manuel Barroso, who suggested the world should be contributing funds to help Europe and defiantly insisted that the continent would not take "lessons" from others about how to run an economy. "

It appears that the only lesson that they've learned is that it's easier to demand bail-out money than it is to actually address the specific problems.

Sounds like sour grapes that they can't get other peoples money to keep their troughs full.

Let the whole continent go bankrupt. They will be forced to fend for themselves then.
 
JLM
No Party Affiliation
#4
Quote: Originally Posted by mentalfloss View Post

Europe snaps back at Harper over lecture on debt crisis

LOS CABOS, Mexico — Prime Minister Stephen Harper issued a stern challenge to Europe Monday to pull itself out of its debt crisis with its own funds and to overhaul the eurozone with structural changes that create a "genuine" financial union.





Europe snaps back at Harper over lecture on debt crisis


Not surprising, Canada has money, Europe wants it. Would you direct some of your investments toward bailing out Europe. What interest would they guarantee you? Perhaps Harper has something more lucrative in mind.
 
Cliffy
Free Thinker
+3
#5
Europeans, although experiencing some economic woes, is still sitting pretty compared to Africa, South American and some Asian countries, but we don't see them even mention helping those countries out. Hard to feel sorry for them.
 
earth_as_one
+3
#6
I don't like the Harper Conservatives, but in this case, I have to agree with them. Canada can't stop this train wreck, so why buy a ticket and get on board?
 
captain morgan
Bloc Québécois
+1
#7
Quote: Originally Posted by IdRatherBeSkiing View Post

Sounds like sour grapes that they can't get other peoples money to keep their troughs full.

Let the whole continent go bankrupt. They will be forced to fend for themselves then.

No doubt, and the notion that the EU is using their bloc trading status as a threat doesn't help them much either... Hell, they've been lording that over Canada for decades with agri products and the baby seal issue.

On a related note, I heard an interview on CBC with an adviser to the German gvt that suggested outright that Greece should abandon the Euro and fix their own problems.... Seems to me that the 'unified Euro zone' that the spokesman talks of is falling apart at the seams
 
JLM
No Party Affiliation
#8
Quote: Originally Posted by Cliffy View Post

Europeans, although experiencing some economic woes, is still sitting pretty compared to Africa, South American and some Asian countries, but we don't see them even mention helping those countries out. Hard to feel sorry for them.

I for one might feel a little nervous, if they did!
 
mentalfloss
#9
Quote: Originally Posted by IdRatherBeSkiing View Post

Let the whole continent go bankrupt.

Dumbest thing I've ever read on these boards.
 
captain morgan
Bloc Québécois
+2
#10
Quote: Originally Posted by mentalfloss View Post

Dumbest thing I've ever read on these boards.


The option that the EU is demanding is that you and I pay them to maintain the same dysfunctional plan that got them into this mess to begin with. Even Germany (the strongest member in the EU) is at the end of their rope on this one.

How much sense does it make to pay them to continue down this road to destruction?
 
JLM
No Party Affiliation
+2
#11
Quote: Originally Posted by mentalfloss View Post

Dumbest thing I've ever read on these boards.

Or one of the smartest, sort of like teaching your kids to quit spending money they ain't got and start living within their means!
 
mentalfloss
#12
Quote: Originally Posted by captain morgan View Post

The option that the EU is demanding is that you and I pay them to maintain the same dysfunctional plan that got them into this mess to begin with. Even Germany (the strongest member in the EU) is at the end of their rope on this one.

How much sense does it make to pay them to continue down this road to destruction?

Who says the EU needs a bailout?

Harper says that EU should be within their means to fix their own mess.

Quote: Originally Posted by JLM View Post

Or one of the smartest, sort of like teaching your kids to quit spending money they ain't got and start living within their means!

Except that if EU goes down then we will be significantly impacted.
 
EagleSmack
#13
The EU wants the US and Canada to subsidize their failing policies. Now that is funny.
 
captain morgan
Bloc Québécois
+1
#14
Quote: Originally Posted by mentalfloss View Post

Who says the EU needs a bailout?

The EU has said it... They want everyone to contribute to a 1/2 TRILLION dollar IMF that, coincidentally, the EU will use to keep this mess afloat

Quote: Originally Posted by mentalfloss View Post

Harper says that EU should be within their means to fix their own mess.

So has the USA and China. Harper isn't alone and it appears that the most vocal nations supporting this bail-out initiative are the EU members themselves.
 
JLM
No Party Affiliation
+2
#15
Quote: Originally Posted by mentalfloss View Post



Except that if EU goes down then we will be significantly impacted.

And we'll be even worsely impacted if we try to bail them out and they still go down. Perhaps our own financial affairs could use a little fine tuning. Many Canadians are living beyond their means!
 
mentalfloss
#16
Quote: Originally Posted by captain morgan View Post

So has the USA and China. Harper isn't alone and it appears that the most vocal nations supporting this bail-out initiative are the EU members themselves.

I don't disagree with the premise that they can resolve their own problems at this time. I just think that if it came to a point where we could objectively determine they need help, letting their economy go down the pooper would hurt us as well.

This is where the confusion lies between "wait and see" and "screw you guys".

It would be like us pledging never to send military aid and watching WW2 wreak havoc on Europe.

Ya.. smart move.

Quote: Originally Posted by JLM View Post

And we'll be even worsely impacted if we try to bail them out and they still go down.

We wouldn't bail anyone out if we knew they would go down anyway.
 
earth_as_one
+2
#17
Quote: Originally Posted by mentalfloss View Post

Dumbest thing I've ever read on these boards.

Loaning Europe more money will not stop the inevitable consequences of Europeans spending beyond their means. We would be just throwing good money after bad if we tried to bail them out with more loans. Until the Europeans curb their spending, they should not get a dime of Canadian taxpayer money.

Would you loan someone money if you knew they spent more money than they earned, intended to keep spending more money than they earned and were now making cash withdrawals on their credit card to make the minimum payments on their loans? Would giving this person more credit solve their problems or just delay the inevitable?

Eventually Europe will declare bankruptcy and their creditors will be lucky to see 5 cents on the dollar. That's why I am against Canada loaning Europeans money.
 
EagleSmack
+2
#18
Quote: Originally Posted by mentalfloss View Post

I don't disagree with the premise that they can resolve their own problems at this time. I just think that if it came to a point where we could objectively determine they need help, letting their economy go down the pooper would hurt us as well.

If the EU fails to fix their problem why should the US and Canada help them?

This is blackmail of sorts.

"Look, we're not going to take the steps to fix our mess so you better send money or else."

That isn't right.


Quote:

It would be like us pledging never to send military aid and watching WW2 wreak havoc on Europe.

Ya.. smart move.

.

Embellishing a bit I think.
 
captain morgan
Bloc Québécois
+1
#19
Quote: Originally Posted by mentalfloss View Post

I don't disagree with the premise that they can resolve their own problems at this time. I just think that if it came to a point where we could objectively determine they need help, letting their economy go down the pooper would hurt us as well.

This is where the confusion lies between "wait and see" and "screw you guys".

The big message that I am getting, not just from the article in the OP, but also over the last 6 months, relates to having a strong plan in place to solve the fundamental problems... Without a strong plan that will be strictly followed by the IMF (and recipient nations), any monies will simply be an infusion of cash that may do nothing more than defer the inevitable.

I hate to bring it up as the reaction from some is to jump down the throat of the messenger, but the epicenter of this issue is Greece and the philosophy that is representative of the gvt/people of that nation... Realistically, the amount of money that Greece would need to balance the books and move forward isn't that much relative to the entire EU (GDP's, etc), but considering the reluctance of Greece to establish a plan that will result in them getting on the road to self-sufficiency (let alone repaying the funds), no one is willing to throw good money after bad.

That said, extending the lending network to the rest of the world makes even less sense
 
earth_as_one
+1
#20
Quote: Originally Posted by mentalfloss View Post

...letting their economy go down the pooper would hurt us as well....

Not as much as losing tens or hundreds of billions to bad loans that can't be repaid...
 
captain morgan
Bloc Québécois
+1
#21
Quote: Originally Posted by earth_as_one View Post

Not as much as losing tens or hundreds of billions to bad loans that can't be repaid...


... On top of the EU having their economies cave-in 6-7 months later
 
Machjo
+1
#22
I can agree with us not giving the EU, money, but I can also understand the EU being frustrated with us telling them what to do with their money.

Let the EU pay the price for its actions. If Canadian money were involved that would be a different matter.
 
captain morgan
Bloc Québécois
#23
Quote: Originally Posted by Machjo View Post

I can agree with us not giving the EU, money, but I can also understand the EU being frustrated with us telling them what to do with their money.

Let the EU pay the price for its actions. If Canadian money were involved that would be a different matter.


The EU is asking for Canadian money (among other nations). The EU has run out of their own and are looking to have outside nations finance their problems.

I also find it surprising that the EU isn't looking to kick-start their economies by organizing more aggressive trade agreements and getting more folks back to work
 
Machjo
#24
Quote: Originally Posted by captain morgan View Post

The EU is asking for Canadian money (among other nations). The EU has run out of their own and are looking to have outside nations finance their problems.

I also find it surprising that the EU isn't looking to kick-start their economies by organizing more aggressive trade agreements and getting more folks back to work

And we said we won't give it. We don't need to them tell them how to run their own affairs.
 
IdRatherBeSkiing
+3
#25
Quote: Originally Posted by mentalfloss View Post

Except that if EU goes down then we will be significantly impacted.

Yes. But it would likely be the end of deficit financing across the board. All governents would be forced to live within their means. Or we can keep building another story on the house of cards.
 
Vancouverite
#26
I don't see any way out for Europe unless it breaks up the Euro zone, and that will just be a start. It will also have to liberalize its rotten economic structure, to allow individuals to do business and create wealth.
 
mentalfloss
#27
Quote: Originally Posted by Vancouverite View Post

I don't see any way out for Europe unless it breaks up the Euro zone, and that will just be a start.

Harper thinks the Euro should remain intact.
 
Machjo
#28
Quote: Originally Posted by Vancouverite View Post

I don't see any way out for Europe unless it breaks up the Euro zone, and that will just be a start.

A common currency has advantages. Immagine if each Canadian province had its own currency! Essentially a common currency makes trade easier and cuts out thecurrency-brokers middlemen.
 
captain morgan
Bloc Québécois
+1
#29
Quote: Originally Posted by mentalfloss View Post

Harper thinks the Euro should remain intact.


There is no reason that it can't remain, however, that does mean that all of the nations that sign-on must play by the same general rules... Having a handful of countries borrow themselves into the poor house (and drag the currency down with it) is not functional, especially when they use their negative economic circumstance as blackmail against the other member nations
 
mentalfloss
#30
Quote: Originally Posted by captain morgan View Post

There is no reason that it can't remain, however, that does mean that all of the nations that sign-on must play by the same general rules... Having a handful of countries borrow themselves into the poor house (and drag the currency down with it) is not functional, especially when they use their negative economic circumstance as blackmail against the other member nations

I agree.

But people are making assumptions about bailouts or stimulus that aren't necessarily true. You can have targeted investment that legitimately helps another economy, thereby benefiting your own as well. Spain just recently received one if I'm not mistaken, and economists were just fine with it.

This is not a black and white proposal, so nobody should be assuming abject austerity or full throttle stimulus are the proposed solutions.
 

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