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French President Nicolas Sarkozy and his pregnant wife Carla Bruni-Sarkozy await the arrival of G8 leaders and their spouses for an evening dinner function at Le Ciro's Restaurant at the G8 Summit on Thursday in Deauville, France. (Chris Ratcliffe/Getty Images/Chris Ratcliffe/Getty Images)
French President Nicolas Sarkozy and his pregnant wife Carla Bruni-Sarkozy await the arrival of G8 leaders and their spouses for an evening dinner function at Le Ciro's Restaurant at the G8 Summit on Thursday in Deauville, France. (Chris Ratcliffe/Getty Images/Chris Ratcliffe/Getty Images)

PM resists G8 calls for more aid to Egypt, Tunisia Add to ...

Prime Minister Stephen Harper has come empty-handed to a G8 summit that centres on aiding Arab countries in their transition to democracy.

Mr. Harper is signalling Canada won't offer direct aid to Egypt and Tunisia as they confront deep economic slowdowns and instability after ousting dictators.

Canada's cautious approach toward the Arab Spring democracy movements is in contrast to many other G8 nations, which are urging grand efforts to back transitions and offering their own packages of financial assistance.

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But Mr. Harper resisted the nudges, suggesting Canada's backing would come through its existing support of multilateral financial institutions such as the African Development Bank, not a new aid package.

"We've upped our capital contributions to the various multilateral banks that will assist in this regard to some $12-billion so I think that's the best way to get a co-ordinated international response," he said on the first day of G8 talks.



Mr. Harper has favoured loan guarantees to development banks as a way to respond to financial crises in developing countries, injecting $4.6-billion since 2009 - which doesn't cost Canada money unless there are sizable loan defaults - to bring Ottawa's total backing to about $12-billion. And with Canada's foreign-aid budget frozen as part of deficit-fighting measures, major new aid packages would likely draw funds from other recipients.

U.S. President Barack Obama came bearing a $2-billion package of debt forgiveness and loan guarantees, and his administration urged other G8 nations to join in forgiving Egypt's debt. The European Union announced plans to increase its assistance fund for North Africa and Eastern Europe by $1.7-billion over the next two years, with much of the new money expected to support Egypt and Tunisia. Britain pledged an additional $175-million aid package on Thursday.

Not all G8 members proposed their own aid packages. Organizers designed the summit as a marshalling of assistance, from both international financial institutions, including the World Bank and International Monetary Fund, as well as bilateral aid - without asking each nation to contribute to a single G8 pledge, in part because it would strain poorer Russia and possibly Japan, struck by earthquake costs and saddled with debt.

But British Prime Minister David Cameron, who has imposed deep budget cuts to reduce his country's deficit, argued bilateral aid for the region would be well spent.

"We're demonstrating that there is a chance for people in North Africa to choose their own future and their own freedom rather than have to put up with appalling dictators like [Moammar]Gadhafi," Mr. Cameron said.

Mr. Harper, meanwhile, was criticized for rejecting new direct aid - a cool response to the Arab Spring that is out of step with other leaders.

"I find the cold bath being poured on financial help to be the same tone-deaf reading of political events in that region that I hoped a postelection government would have got past," Jeremy Kinsman, a former senior Canadian diplomat, said in an e-mail from a conference on Egypt and Tunisia in Brussels.

However, Mr. Harper has adopted a stronger tone on pressing dictators who have cracked down on democracy movements. His aides noted his support for sanctions against Syria and Libya, and Canada's involvement in the military mission in Libya. And Mr. Harper joined other G8 leaders in calling for Yemen's President, Ali Abdullah Saleh, to step down amid rising violence.

"Look, we think for the most part these changes are good changes; at the same time, we are certainly aware of the risks that are presented there," Mr. Harper said. "As you know, we are already engaged militarily in Libya and obviously the situation in Yemen is quite serious."

Mr. Harper, staunchly pro-Israel, has also avoided the ardent calls for Middle East peace talks to resume quickly with tough concessions by both sides that many G8 leaders have urged.

Mr. Obama's call for talks to use Israel's prewar 1967 borders, plus negotiated land swaps, as a starting point, has been rejected by Israel but endorsed by several other G8 leaders - placing Mr. Harper in the delicate position of trying to find a middle course between allies. On Thursday, French President Nicolas Sarkozy described the Palestinian reconciliation between more moderate Fatah and the militant Hamas, which does not recognize Israel's right to exist, as good news that could help talks proceed.

Mr. Harper suggested that some points in Mr. Obama's speech had been over-emphasized - presumably the call for 1967 borders to be a starting point - but noted that Mr. Obama has insisted Palestinians must recognize Israel's right to exist.

"President Obama emphasized that in a two-state solution, one of those states has to be a Jewish state and conceded to be a Jewish state, another is that the Palestinian state must be a demilitarized state, so I think these and other message are important messages to deliver," he said. "And I say I think if you look at the statement in its totality, it was very balanced and it is certainly something that Canada can support."

With a report from The Associated Press

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