Business

Flaherty urges Europe to act on financial crisis

Finance Minister Jim Flaherty said Europe must act decisively to deal with an ongoing financial crisis that threatens to plunge Greece into default.

Finance Minister Jim Flaherty said Europe must act decisively to deal with an ongoing financial crisis that threatens to plunge Greece into default.

"It is important that Europeans take decisive action to resolve their debt issues and mitigate the market turmoil and uncertainty that is holding back growth, and that countries such as Greece follow through on meeting their reform commitments," he said.

"We need to resolve the issue in Europe because it is creating a great deal of uncertainty in the world, and uncertainty is the enemy."

Europeans, he said, must also be prepared to recapitalize their banks.

Flaherty spoke to reporters in the foyer of the House of Commons before he headed to Washington, D.C. Thursday for a series of meetings with G20 finance ministers, and the IMF and the World Bank, on the economic situation.

Earlier in the day, Prime Minister Stephen Harper and the leaders of Australia, Indonesia, Mexico, the Republic of Korea and the United Kingdom sent an open letter to French President Nicolas Sarkozy, the current chair of the G20, urging strong action at an early November summit in Cannes, France to help ensure global stability. 

"I  think there's some justified frustration with respect to the lack of political decisiveness in Europe," he said, adding that finance ministers have been talking about Greece since January 2010.

"As you can see, the markets are reacting," Flaherty said, alluding to Thursday's plunge on global stock and commodity markets. "There's a need for an exercise of political will -- a political decision making in Europe."