OTTAWA (Reuters) - Canada is willing to discuss the idea of fiscal stimulus at the upcoming meeting of the Group of 20 wealthy and emerging nations, but the government believes countries must focus on repairing their finances, Finance Minister Jim Flaherty said on Wednesday.
“We can have a discussion about (stimulus), but obviously countries have to get their financial houses in order, otherwise we’ll be back in the soup that we’re in now,” he told reporters in Ottawa.
Flaherty said further steps in Europe - he has called for bank recapitalization and a bigger firewall around the countries worst hit by the euro zone crisis - are needed to restore market confidence and promote economic growth.
G20 leaders will meet in Los Cabos, Mexico, June 18-19 and aim to come up with an action plan to support global growth, similar to the blueprint they came up with at their summit at Cannes, France, last year.
A European source said the plan might include commitments to roll back austerity budgets in certain countries, something newly elected French President Francois Hollande is pushing for.
Austerity advocates in Germany, meanwhile, were keen to put some of the focus on the so-called fiscal cliff faced by the United States at year-end. Some analysts have warned of a looming U.S. financial crisis and recession if Congress fails to agree on a sweeping deal to curb the deficit or pass legislation to stop scheduled spending cuts.
But Flaherty appeared far more patient with his U.S. counterparts than with the Europeans, whom he has criticized repeatedly for dragging their feet in addressing the debt crisis.
“I think the United States understands its fiscal situation, the current administration does. The difficulty in the United States is political gridlock, that the administration is unable to move forward,” he said.
Reporting by Louise Egan; Writing by Jeffrey Hodgson; Editing by Peter Galloway