MUMBAI (Reuters) - Canada’s finance minister said on Tuesday that recovery in economies battered by the global downturn remains fragile, and reiterated calls for more flexibility in Asian currencies.
“We need to be very conscious that we have been through a very difficult time, and the difficult time is not yet clearly behind us,” Jim Flaherty said in a speech to a business group in Mumbai, India’s financial capital.
“The recovery that we have seen in those countries that went through a recession, including Canada, is a fragile recovery. There are indications of recovery, but no clear indications of an entrenched recovery,” he said.
Flaherty reiterated Canada’s long-held stance on wanting more flexibility in Asian currencies, saying it was needed for a sustainable growth framework and that the issue would be raised in June.
“We agree that there should be more flexibility in those Asian currencies that are not flexible,” he said in response to a question on whether Canada would prefer that the Chinese yuan be more flexible.
“The Canadian dollar is a market currency and we found that works well. This is an issue with respect to the flexibility of currencies that comes up repeatedly at our international meetings and it is all the more important now because of the need for a strong, sustainable growth framework for the world, so I expect that it will be discussed in June,” he said.
It was not clear if he was referring to the Group of 20 finance ministers’ meeting in South Korea or the summit in Canada, both of which will be held next month.
Flaherty also reiterated his country’s opposition to a global bank tax and said the G20 summit gathering next month would include discussions on fiscal consolidation and financial sector reform.
Canada is preparing proposals on stricter banking regulations ahead of the G20 summit, Stockwell Day, Canada’s President of the Treasury Board, said on Tuesday in Shanghai.
Canada, which will host the Toronto G20 summit in June, has been outspoken in its opposition to a proposed global bank tax, and Flaherty said that India, which is also a member of the G20, shares that position.
“There are a number of countries in the G20 that are of the view that whatever has been proposed has to take into account individual country circumstances,” he told reporters following the speech.
“India is one of the countries in which the financial system, the financial institutions functioned well. Like Canada, they do not see the need for an ex-ante bank tax,” Flaherty said.
The G20 grouping gathers major developed and emerging economies representing about 80 percent of global gross domestic product.
“The event is an important event, particularly in light of some of the continuing challenges that we have globally and in Europe now, related to the euro and other issues related to sovereign debt in some countries,” Flaherty said.
Editing by Tony Munroe & Kazunori Takada