September 28, 2011 / 7:43 PM / in 6 years

Canada will be flexible on policy if shock hits

OTTAWA (Reuters) - Finance Minister Jim Flaherty said on Wednesday he would adjust fiscal policy if the economy is hit by a global shock, while renewing his call for European leaders to take urgent measures to solve the euro zone debt crisis.

<p>Canada's Finance Minister Jim Flaherty speaks during Question Period in the House of Commons on Parliament Hill in Ottawa September 26, 2011. REUTERS/Chris Wattie</p>

“As the prime minister and I have said, if we get a shock from outside our country, then we will have to be responsive and we’ll be flexible and pragmatic,” Flaherty told reporters.

Flaherty would not comment on a meeting he held late Tuesday with Prime Minister Stephen Harper and Bank of Canada Governor Mark Carney.

He said Canada now has an “expansionary economic policy,” referring to measures in his last budget, such as a hiring credit for small business, which will be contained in budget implementation legislation to be introduced in Parliament in the coming days.

Flaherty said he was confident after meeting with G20 colleagues that European leaders have a greater sense of urgency about dealing with the debt crisis.

“We’ve been clear in our view ... that they have to get themselves in a position where they can overwhelm the problem, get ahead of the markets and be in charge of the situation rather than react to the situation.”

Reporting by Louise Egan, writing by Andrea Hopkins; Editing by Jeffrey Hodgson and Peter Galloway

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