Europe should rely on its own to tackle crisis: Flaherty

Mon Nov 14, 2011 2:33am EST
 
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By Nick Edwards

BEIJING (Reuters) - Europe should first use its own resources to resolve the debt crisis before seeking help from outsiders, Finance Minister Jim Flaherty said on Monday.

"Generally, we first need to see a very substantial commitment from European -- and I'm talking about the euro zone -- before any more could be asked of non-European (G20) countries," Flaherty said when asked about conversations he'd had with Chinese officials about European requests for external aid.

"It is fair to say that the view (among G20 nations) is that Europe needs to use it's own resources in the first place to address the issues for European banks," Flaherty said.

Politicians in Italy and Greece, rushing to form governments will face a critical test of their ability to limit the damage from the euro zone debt crisis when financial markets open on Monday.

An agreement by the Group of 20 leaders earlier this month to quicken a move toward market-driven exchange rates, including in China, was a "significant move" in the right direction, Flaherty said.

"This is progress," said Flaherty, who was in Beijing to open the Beijing representative office of TSX, meet with senior officials from China and give a speech to the Canada China Business Council.

China faces growing pressures from Western countries, particularly the United States, to let the yuan rise faster to help rebalance the world economy, but Chinese officials have resisted such calls.

(Writing by Kevin Yao; Editing by Ken Wills)