MANSBRIDGE: When you talk about having to have a contingency plan, a kind of plan B, is this impact the kind of economic measures you’ve had in the last budget, or last year? Is that the kind of thing we are talking about?
HARPER: No, I don't think it's helpful for leaders to speculate on catastrophic scenarios, there's every reason we should avoid those, Peter. Europe remains, for all its troubles, one of the richest parts of the world. It has the capacity, if it can get the will and coordination, to deal with these problems. But if we found ourselves in catastrophic situations as we did in ‘08-‘09, these would be additional things we would have to do.
MANSBRIDGE: What about the Euro? We hear increasing suggestions, some from some key people, that it's time is over. That the Euro should be done. What would happen if it was?
HARPER: Well I think that would be a very tough evaluation one that I wouldn't share. The way that I would put it Peter, and I'm not trying to be diplomatic. I’m trying to be more nuanced and realistic. I think what has to happen is there has to be a serious examination of the shortcomings of the Euro structure. Euro central institutions, whether it be fiscal policy, monetary policy, financial regulation, are simply not as robust as they are in a currency that has a national government behind it. And for whatever reasons those things weren't felt necessary when Euro was conceived. But in a time of crisis to sustain the Euro they have to do a much bigger job of integration than they have done until this point. The Euro in its present form will change. Hopefully it will be changed because leaders will recognize changes have to be made and will act in concert to do that, or the alternative will be that it will come apart one country at a time. And that will be very bad for everybody.
MANSBRIDGE: Why would that be very bad? Or not why would it be very bad, but how would it be very bad?
HARPER: You can have the economists tell you the effects that has on speculation and bond markets, and everything else, and the effect on the banking system. But if you have unplanned exits, as we saw with Lehman Brothers -- any big unplanned major shock to the financial system is never a good thing.
MANSBRIDGE: Last point on this and it brings it down the level of those at home. I know you don't like, at least any more, talking about what people should do in the markets, or even suggesting what they might consider. But you know as well as I do that a lot of people out there are taking a beating with their RRSP's, which is a major concern, over these last six months. What should they do? Because every day brings these kind of stories and discussion about how bad things could get and contingency plans and plan B and this and that and it all seems to have impact on things as simple as Joe Blow's RRSP.
HARPER: Well Peter, I'll give the same advice I gave before. Which maybe I didn't express well at the time, but which is always to take the longer view. As Prime Minister I am not allowed to invest speculatively and so I don't. But to the extent I advise people, as we do with the government, think about what you need to do in the long-term to grow your portfolio. Be in markets and places where the business is good, where the long term prospects are solid, and focus on that. Things will go up and down in short term, they always do. It’s been more spectacular over the last five years than in 80 years, but nevertheless those things come and go, there will always be solid businesses and solid markets will always experience growth over time. Have a mid- to long-term game plan and stick with it.
MANSBRIDGE: – So don’t cut and run from the market?
HARPER: Don't cut and run. And that’s what our financial institutions do. That’s why we have the most solid financial institutions in the world. They don't think that way. They don't cut and run and they don't get involved in a lot of short term speculation.
Follow us on Twitter: