Noting that Canada, like Australia, was a founding member of the Commonwealth in 1931, Harper said that Canada attaches great significance to the world body.
As a voluntary association, the Commonwealth now comprises 54 independent countries that work together toward shared goals in democracy and development.
Canada and Australia have a common heritage because they both emerged as sovereign dominions from the British Empire, Harper said.
But he added that, beyond this common history, the Commonwealth “has embodied and has articulated the common values that flow from that history: principles such as freedom, democracy, human rights, and the rule of law.”
Harper spoke of the economic downturn, noting that the global economy “has endured the worst financial crisis and recession since the 1930s.”
“It ruined venerable banks; it battered established currencies; it shook governments to their core; and it triggered aftershocks and repercussions with which we must still contend.”
Harper pointed to Canada’s economic action plan to stimulate the economy, medium-term plans to return to balanced budgets, and long-term agenda to support growth and job creation.
“Canada is one of only two G-8 countries that have more people working now than before the 2008 recession,” he said, adding that the country was just declared by Forbes magazine as the best country in the world for business.
European Debt Crisis
With the G-20 Summit in Cannes, France, taking place on November 3–4, the main focus of Harper’s speech was the European debt crisis and “the very real risk, if appropriate and timely decisions are not made, of a second round of global recession.”
Calling it “the most immediate and imminent threat to the global recovery,” Harper said that “because of the integration of their financial systems and a common currency, what started as a sovereign debt crisis in some peripheral European countries has come to pose grave risks to the larger European financial sector.”
A solution requires “something big enough in terms of scale and decisive enough in terms of sacrifice, that markets will be convinced the problem is being tackled and the pain is being accepted. Only then will fear subside and confidence be restored.”
Harper expressed “cautious optimism” from the recent news that European leaders, as part of a comprehensive set of measures to deal with the sovereign debt crisis in Europe, had agreed to recapitalize the region’s banks and announced that they would increase the European financial rescue fund to about 1 trillion euros (C$1.4 trillion).
In addition, private holders of Greek government bonds are being asked to take a 50 percent loss on their holdings as part of measures to lighten the country’s debt burden.
G-20 Summit Focus Issues
Harper said the G-20 Summit will focus on four main issues: macroeconomic policy coordination, especially in terms of fiscal policy; financial-sector regulation; international trade policy; and dealing with global imbalances.
He said that underlying the current European crisis is the fact that deficits and national debt in many countries had become unsustainable.
But Harper noted he still believed that the medium-term debt and deficit reduction targets that all countries set for themselves at the G-20 summit in Toronto last year remain a good starting point for future G-20 efforts, adding that “Canada will meet G-20 fiscal targets next year, well ahead of schedule.”
The G-20 must also continue efforts to promote global trade, fight against global protectionism, and eventually become “the standard-bearer for free trade.”
To deal with “global imbalances,” Harper suggested that concrete progress must be made on the global “framework for strong, sustainable, and balanced growth” that was first outlined at the G-20 summit in Pittsburgh in September 2009.
He took China as an example. “To be frank, it will not be indefinitely sustainable for an economy as large as China to run large surpluses with inflexible exchange rates,” he said.
“The resulting deficits elsewhere lead, in fact in some cases are already leading, to suboptimal policies and, if left unresolved, will eventually and inevitably lead to bad policies, like protectionism,” Harper added.
“To be clear, these imbalances aren’t going to put the global economy off the rails immediately. But the longer this problem remains, the higher the risks will become.”
‘Be Activist, Not To Be Alarmist’
In conclusion, Harper reiterated his optimism that all of these challenges can be addressed.
“My intention is to be activist, not to be alarmist,” he said.
He also praised the European Union as a “remarkable achievement” in terms of “an amazing level of integration and coordination.”
“No group of the world’s nations have more consistently demonstrated an enlightened approach to sovereignty in recent decades than the countries of the European Union,” he said.
“The nations of Europe are strong, their economies are diverse and their people industrious and enterprising. If the people of Europe are given a clear plan, a plan that will work, they will do what they must, what Europe needs, what the world needs.”
