| MONTREAL, June 11
MONTREAL, June 11 Canadian Prime Minister
Stephen Harper will preach the benefits of austerity to world
leaders when they gather in Mexico next week, arguing that tight
budgets and healthy economic growth are both possible.
In a speech on Monday, Harper came down firmly on the side
of Germany, which has emphasized the need for fiscal discipline
as opposed to economic stimulus measures.
But as he seeks to gain influence ahead of the Ju ne 18-19
summit of the Group of 20 advanced and emerging nations, he
framed the austerity-versus-growth debate as a "false choice".
"This will be Canada's message at the G20 summit: economic
growth and fiscal discipline are not mutually exclusive; they go
hand in hand," Harper said in the prepared text of his speech to
a business audience in Montreal.
There is a growing push in the euro zone, led by newly
elected French President Francois Hollande, to do more to
stimulate growth and not just focus on reducing deficits. Harper
met with Hollande in Paris last week.
Germany, the European Union's paymaster, has taken a hard
line in favor of tough fiscal targets over the past several
years, but it has recently softened its tone and agreed to allow
Spain more time to cut its deficit as Madrid battles a deep
In the United States, President Barack Obama talks about the
need to stimulate the faltering economy but has few options due
to opposition from the Republic majority in the House of
Harper said his Conservative government's approach should be
a model for the rest of the world, portraying it as a balance
between fiscal discipline and growth-boosting measures such as
free trade agreements and changes to employment insurance,
pensions and immigration policy.
"The Canadian approach is what the world needs," he said.
Canada has a small fiscal deficit of about 1.5 percent of
gross domestic product, and plans to balance its budget by the
2015-16 fiscal year.
Harper has bluntly refused to contribute additional money to
the International Monetary Fund to cope with Europe's debt
crisis, saying European countries are rich enough to handle the
On Monday, he applauded the euro zone's agreement to lend
Spain up to 100 billion euros ($125 billion) for its troubled
"I am encouraged to hear of the agreement concluded
among members of the euro zone to ensure the stability
of the Spanish banking system," he said. "This is the type of
measure that Canada favors."