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Flaherty urges Europeans to do more on debt crisis

Finance Minister Jim Flaherty pauses during a news conference in Ottawa Wednesday.

CHRIS WATTIE/REUTERS

The leaders of the world's most important economies left the G20 summit in Mexico this June professing a new-found confidence that Europe would finally take bold action to get its economic house in order.

Two months later, the 17-member euro zone's economy remains anemic, with no end in sight to the continent's debt crisis.

Finance Minister Jim Flaherty is among those lamenting Europe's lack of action to contain its financial woes.

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"Not enough has been done," Mr. Flaherty said Wednesday. "They need to do much more."

Some necessary steps have been taken, particularly by the European Central Bank, he said. But the Finance Minister stressed the need for more action.

"We have been clear for several years that not only should the European countries take overwhelming, concerted action to take control of the situation," Mr. Flaherty said, "but also that the European countries themselves have more than adequate resources to do so."

Charting a course for the economy will be on the Finance Minister's to-do list when he meets business leaders, academics and other experts over the next two days during his annual summer retreat in Wakefield, Que.

Mr. Flaherty's comments about Europe's lack of action come as Prime Minister Stephen Harper welcomes German Chancellor Angela Merkel to Ottawa.

Up for discussion between the two leaders will be the free-trade deal between Canada and the European Union that Mr. Harper's Conservative government hopes to ink before the end of the year.

At some point, talk will undoubtedly turn to Europe's debt crisis.

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The Conservatives have been adamant that Canada will not contribute to a global bailout package through the International Monetary Fund.

Mr. Flaherty reiterated that position Wednesday, but he also showed frustration with the Europeans for not taking what he said are clear steps to remedy their economic woes.

"My European colleagues and I speak, and I know them all well," he said.

"It really is up to them to deal with this issue. This is a European issue. It is the euro, is the currency. The European Central Bank is the European Central Bank. And just as I would not expect them to try to indicate to me how we should deal with the Bank of Canada, or how we should deal with our own issues here in Canada, similarly it's up to them to deal with those issues."

The solution and the road forward is very clear, he added.

"They need to re-capitalize banks and they need to deal with the sovereign debt situation. We've known this for several years now, which makes it rather frustrating at the end of the day, quite frankly."

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