October 5, 2011 / 3:08 PM / in 6 years

Flaherty says it's Europe's decision time on Greece

NEW YORK (Reuters) - Europe should renegotiate Greece’s debt if necessary and “move on”, Canada’s finance minister said on Wednesday, sounding more frustrated than ever by the euro zone’s inability to solve its sovereign debt crisis.

“The slow response to this crisis is what has allowed it to spread,” Finance Minister Jim Flaherty told an audience of bankers in New York. “This crisis could have been averted a year ago. This crisis could have been averted before it threatened global growth.”

Ottawa backs an expansion of the European bailout fund to prevent contagion from Greece. Flaherty declined to comment on the International Monetary Fund’s idea, floated earlier on Wednesday, of buying Spanish or Italian bonds alongside the bailout fund to help boost investor confidence in those countries.

With world stocks and commodities slumping in recent sessions on mounting concerns that a Greek debt default could trigger a banking meltdown, Flaherty once again pressed his European counterparts to decide “whether they will support Greece unequivocally”.

“They need to come to a solution with respect to Greece. If Greece can’t afford to repay, and it appears they can’t afford to repay, then some sort of restructuring has to be negotiated with Greece so the euro zone can move on from this problem,” he said.

The Group of 20 need to put aside their differences and take coordinated action to prevent another global recession, he added. (Reporting by John McCrank; Writing by Louise Egan; editing by Peter Galloway)

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