Prime Minister Stephen Harper, who was in Berlin this weekend, has firmly opposed a global bank tax as a way to prevent another recession.Adrian Wyld
The Economist magazine is siding with Stephen Harper as he resists European pressure to support a new global tax on banks.
The British magazine was a fierce critic of the Prime Minister just over five months ago for proroguing Parliament, but Canada's strong job numbers and quick turnaround from the recession earns feature attention in the latest issue of the influential weekly.
"When Americans and Europeans press Mr. Harper at the G20 meeting to accept a tax on banks to curb their riskiness, he has reason to retort that Canadian-style regulation does the job better," the article says .
The praise for Canada's economic performance does not go directly to the Prime Minister, though.
"Much of the country's resilience stems from policies -such as bank regulation and sound public finances - which predate Mr. Harper. The Bank of Canada can share some of the credit too. But Britons might note that Mr. Harper has managed to govern for four years without a parliamentary majority, and that this has not prevented Canada from sailing through the recession."
The dispute over bank taxes is shaping up as a key point of debate in Toronto when Canada hosts the G20 June 26-27, immediately after Canada hosts the G8 in Huntsville, Ont.
Rather than taxing banks, Mr. Harper said, he wants the G20 to focus on plans to tackle growing deficits and improve financial-sector regulation. But that agenda is at risk of being eclipsed by events tied to the Greek debt crisis.
Many of Mr. Harper's G20 agenda items are now at the heart of emergency negotiations within the EU that ran throughout the weekend with a self-imposed Monday deadline.
The high-stakes scramble is in response to nervous financial markets, which declined steadily last week amid concern the EU and International Monetary Fund's Greek $140-billion bailout would not be enough to contain the spread of debt fears across Europe.
The market reaction led to concern that the situation risks triggering a double-dip global recession unless further action is taken.
The EU is now promising a second economic rescue plan, focused on tackling deficits, regulating financial markets and devising a new way for EU members to protect their common currency.
"All members of the euro zone have to reduce their deficit with determination and great speed," German Chancellor Angela Merkel said Saturday after a bilateral meeting with Mr. Harper in Berlin.
The EU negotiations over the weekend mark a striking shift from its earlier assertion that the original package was all that was required.
Just last Wednesday, during a Canada-EU summit in Brussels, EU Commission President Jose Barroso insisted the original plan was enough and urged everyone to "keep cool."
Mr. Harper agreed.
"These are very large actions," the Prime Minister said Wednesday of the first bailout. "They are sufficient to deal with the problem."
Yet just three days later, Mr. Harper found himself standing next to Ms. Merkel at the chancellery as she explained why EU members now "believe the security of the euro zone as a whole is not guaranteed with this program alone."
German citizens, in particular, are not impressed that their government is using billions of their tax dollars to bail out Greece, and Ms. Merkel and the EU want a bank tax to build an insurance fund in the event of a future financial crisis.
Bill Curry