Europe’s response to debt crisis disappointing, says Canadian minister

EUROPE’s response to the sovereign debt crisis spreading across the eurozone and threatening the global economy has been “disappointing” and has allowed the problem to grow, according to an international finance minister.

Addressing an Ireland-Canada Business Association lunch in Dublin yesterday, Canadian finance minister Jim Flaherty said “too much time has been wasted and too many opportunities have been missed” by policymakers; and warned that unless decisive action is taken shortly, another “full-blown” global crisis is inevitable; “albeit, this time without the full arsenal of policy weapons at our disposal”.

“The good news is that this crisis can still be contained and reversed, if nations summon the determination to do so. The bad news is that this crisis has already cost way too much. If this crisis is left unaddressed, it will eventually become too big for Europe to solve. This is why immediate action is needed. Delays will only make necessary choices more difficult, and this crisis more costly.

“In a global economy, we’re all in this together. We didn’t get into this crisis overnight and we won’t get out of it overnight; but we can no longer afford any more missed opportunities,” Mr Flaherty said.

The minister flew into Dublin after attending the G20 summit in Paris at the weekend. There, he told fellow finance ministers that the risk of another global recession will be “dramatically higher” if next Sunday’s European summit fails to deliver. The G20 ministers used the Paris meeting to give an eight-day ultimatum to Europe’s chief policymakers to come up with a plan to address the debt crisis.

At yesterday’s lunch, Mr Flaherty — who also paid tribute to the decisions taken by the Irish Government to stem this country’s problems — said that “vague announcements” cannot be used as a substitute for “a clear and comprehensive plan”.

“This is a time for elected governments, heads of state and ministers of finance to rise to the opportunity and show true leadership. Leadership requires not only discussions and announcements, but concrete actions and consistency,” he added.