Countries engaged in aggressive stimulus measures because of the recession should continue to honour those commitments, but should also understand that high levels of debt and deficit cannot continue indefinitely, Prime Minister Stephen Harper said Saturday.
During a joint news conference with German Chancellor Angela Merkel in Berlin, the two leaders said debt and deficit reduction, along with reform of the financial sector, will be discussed at the G20 summit taking place June 26-27 in Toronto.
"All members of the eurozone have to reduce their deficit with determination and great speed," Merkel said.
Harper said the "finances of certain governments" and not the financial sector is to blame for the current European debt crisis.
PM says countries worldwide must tackle debt levels
"It is important for all countries to understand that high levels of deficit and debt cannot continue indefinitely. In some countries they are very high. That issue does have to be tackled, not just in Europe but across the globe," he said.
The prime minister declined to specifically address the Greek debt crisis, saying he believes Europe can sort it out.
"I'm confident [markets] will see rationality as we move forward, but at the same time, I'm also quite confident that our European friends will take whatever measures are necessary to ensure that the situation moves forward in a positive direction," Harper said.
Fears that Greece may be insolvent despite an International Monetary Fund-European Union bailout sparked losses on financial markets over the past two days.
During his visit Friday to Zagreb, Croatia, Harper said highly indebted countries that continue borrowing heavily pose a "real risk" to global economic recovery.
He said that's why exit strategies from stimulus spending will be on the table at the G20 summit.