Flaherty keeps pressure on Europe ahead of Merkel visit

Finance Minister Jim Flaherty continues to criticize what he sees as insufficient response on the part of Europeans to their ongoing debt crisis.

Flaherty paused and appeared to choose his words carefully when asked by reporters in Ottawa Wednesday whether Canada would reconsider contributing to the International Monetary Fund's efforts to support struggling European economies.

"Not enough has been done," Flaherty told reporters in Ottawa Wednesday. "They need to do much more."

Canada's finance minister did acknowledge that "some steps were taken" after the G20 meetings in Mexico in June, particularly by the European Central Bank, "which are progressive, which are useful."

Flaherty repeated his call for European countries to take "overwhelming, concerted action to take control of the situation." He also said that the countries themselves have "more than adequate resources to do so."

"It's not necessary for Canada to use Canadian resources to help solve the European problem given that the European countries are among the wealthiest in the world."

"It really is up to them to deal with this issue," Flaherty repeated later. "This is a European issue."

Garneau against contributing more to IMF

Speaking at a press conference of his own, Liberal House leader Marc Garneau agreed with Flaherty's assessment that Canada should not contribute to the IMF's package.

"I believe that Europe has the tools to solve its problem. It's a tough problem but I believe that they have the means to do it," the Quebec MP said Wednesday. 

"The remedy is clear," Flaherty suggested. "They need to recapitalize banks and they need to deal with the sovereign debt situation."

"We've known this for several years now," the finance minister added, "which makes it rather frustrating at the end of the day, quite frankly, but it's difficult for them to come to these kinds of decisions because they don't have a central ministry of finance."

Flaherty said he has a good relationship with his European counterparts and regularly shares his perspective with them, noting that Canada has a good track record of balancing fiscal responsibility with the need for economic growth.

Two-day policy retreat begins

Flaherty is hosting his sixth annual summer policy retreat in Wakefield, Que., today and tomorrow.

Each year, an invited group of experts and representatives discuss what governments as well as the private sector can do in response to current economic challenges. The retreat feeds into preparations for the government's fall economic statement.

"We certainly have our work cut out for us in spite of some encouraging signs during the past year," Flaherty said. "The global economy remains stubbornly fragile."

This year, the policy retreat coincides with the timing of an official visit to Canada by German Chancellor Angela Merkel. Economic issues are expected to dominate the private bilateral talks scheduled for later today and tomorrow morning between Prime Minister Stephen Harper and Merkel.

Flaherty mentioned the potential two-way benefits if Canada and the EU succeed in inking a free trade deal before the end of the year.

"The EU is still the largest market in the world in terms of the size of the middle-class population in Europe," he noted.