Canada prepares contingency plan amid euro crisis

Fri Jun 8, 2012 2:33pm EDT
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QUEBEC CITY (Reuters) - Canadian Finance Minister Jim Flaherty said on Friday he expects moderate growth in the second quarter of this year, but that Ottawa nonetheless has an emergency plan ready to protect the economy if the European debt crisis worsens.

For the first time this week, both Flaherty and Prime Minister Stephen Harper have spoken openly about contingency plans, invoking measures like the ones used in the 2007-09 credit crisis.

"We are worried, we're seriously concerned of course about what's going on in Europe. We've been through this before, we went through it in 2007, 2008, 2009," Flaherty told reporters in Quebec City.

"We took certain steps at that time with respect to credit markets and with respect to the real economy. I would hope we never have to go back to that situation again but if we have to ... (we will) take steps to make sure that we have liquidity in Canada, make sure that our financial system operates well, make sure Canadian businesses can continue to borrow and invest and create jobs ...," he said.

(Reporting By Leila Lemghalef; Writing by Louise Egan; Editing by Jeffrey Hodgson)