By Randall Palmer Reuters
OTTAWA–If European countries are not prepared to bail out fellow eurozone members, maybe they should just abandon the whole concept of a common currency, Canadian Finance Minister Jim Flaherty said on Monday in some of his most direct remarks on the issue. “This is a time of crisis in the eurozone. The whole future of the eurozone is up for grabs, and this is very important for many of the eurozone member countries, given the history of Europe in the last 100 years or so,” Flaherty told CTV television. “So they have to show courage. They have to do the right thing, use some of their taxpayers’ money to bail out some of the weaker members of the eurozone — or start moving away from the eurozone and just say this was an experiment that has not worked.” Flaherty, who has been a harsh critic of what he calls European incrementalism, also predicted a disorderly restructuring of the eurozone if Greek voters reject their country’s recent bailout. “If the voters of Greece reject the deal that was signed that involves austerity for the Greek government, which doesn’t exist right now, then they will demonstrating a choice,” he said in a separate interview with CBC television. “And that choice to me means that there would have to be some restructuring of the eurozone. We don’t exactly know how that can be accomplished. It’s certain to be disorderly. And that’s not good for markets. It’s not good for the banking system around the world.”
He said it was not clear to him that the Spanish and Italian governments would “be able to manage what needs to be done given the unwillingness of many voters to go along with that kind of economic reform.” Canada’s banks, budget and economy came through the 2007-09 financial crisis in better shape than those of most other major developed countries, and Flaherty has often been blunt in urging swift and comprehensive action by Europe. “What we see is incrementalism in the European system that is ineffective,” Flaherty told an earlier news conference held to promote the Conservative government’s budget implementation bill.