You might call it the Ottawa Doctrine. Canada’s top officials took to the streets of Europe this weekend with a sharply worded new message for the continent – in essence, “You’ve got enough money to sort out your own problems. Leave the rest of us alone.”
As European officials scrambled to assemble a monetary firewall against further debt crises after failing to agree on one on Friday, they turned to the International Monetary Fund, and to cash-rich emerging economies like China and Brazil, for extra loans to help top up the trillion-euro fund known as the European Financial Stability Facility.
But it was left to the Canadians to pour cold water on that idea. In a sequence of statements, Canada’s leaders said that the world’s credit should not be used to help Europe, which is the world’s largest economy.
On Saturday night, Finance Minister Jim Flaherty travelled to Berlin, where he took part in a panel discussion in which he delivered a subtle version of this message. Afterwards, talking to reporters, he stated it more explicitly:
“There is a view, which I share, that the euro zone countries are relatively rich in world terms and have the tools and resources themselves” for righting their fiscal problems, Mr. Flaherty told the Financial Times.
That echoed a message delivered by Prime Minister Stephen Harper at the G20 summit in Cannes on Friday, where he told reporters in no uncertain terms that Canada would not be contributing any loans or funds to the European bailout – and that the 17 nations that share the euro should not be expecting any other help from outside.
“These are wealthy countries who’ve got to have, and do have, the means to deal with their own problems,” he said, noting that the United States managed its own large-scale bailout three years ago without resorting to external funds.
Both Mr. Flaherty and Mr. Harper noted that the IMF’s funds, and those of China and Brazil, ought to be saved for crises that could afflict the developing world.
That sort of tough-love message may have raised hackles in some quarters – notably in France and Germany, which had hoped to avoid spending further taxpayer resources on bailouts. As such, it could contribute to a growing diplomatic disquiet between Canada and the continent, where conflicts over the European Union’s boycott of Alberta oil and the seal hunt have raised tensions.
But it did put Ottawa on good terms with the developing world, where the idea of a poor-country bailout for Europe raised a number of eyebrows.
“Don’t pin high hopes on China. China cannot be a hero to the rescue,” Cheng Siwei, a former vice premier of China, told reporters on the weekend. “China will lend a helping hand within its capacity, but Europe must rely on itself.”Report Typo/Error