Germany wants financial help, Canada wants trade deal as leaders prepare to meet in Ottawa


Canada's Prime Minister Stephen Harpera and German Chancellor Angela Merkel in this 2010 file photo.

Canada's Prime Minister Stephen Harpera and German Chancellor Angela Merkel in this 2010 file photo.

Photograph by: REUTERS , National Post

OTTAWA — A game of give-and-take is expected when Prime Minister Stephen Harper welcomes his German counterpart, Angela Merkel, to Canada for an official two-day visit Wednesday.

Harper will be looking for Merkel, the leader of the European Union’s largest economy, to lend her support to a free trade agreement between Canada and the EU as negotiations enter the critical last stages over the next few months.

For her part, the German chancellor will ask Harper to reconsider his steadfast refusal to sending Canadian dollars across the Atlantic to help Europe contend with its ongoing economic crisis.

A German Embassy official said Merkel’s two-day visit was prompted by a personal invitation from Harper after numerous meetings between the two leaders at the G8, G20 and NATO summits.

The German official downplayed the significance of the free-trade talks in the upcoming visit, pointing out that the EU’s bureaucratic arm, the European Commission, is responsible for the negotiations and individual countries do not influence the outcome.

But speaking to reporters in Toronto on Monday, Harper made no secret of his plans to make the trade talks a high priority during Merkel’s visit.

“I think it is important at this time in the world economy — all the difficulties we face and particularly Europe faces — I think it’s important that Canada and the European Union drive these negotiations to conclusion,” Harper said.

The talks are entering the final stages — at which point negotiators will turn to their respective governments to approve the final, most politically sensitive details.

Daniel Schwanen, an economist at the C.D. Howe Institute, said that for that reason alone, getting the EU’s largest economy on side is important.

That may be easier said than done.

Jason Langrish, executive director of the Canada Europe Roundtable for Business, said Germany has been a strong supporter of Canada-EU free trade, and a deal remains a big priority for the country.

But German officials have also privately criticized the Conservative government’s refusal to reform its supply-managed agricultural sectors in the past, particularly its dairy industry.

Meanwhile, the Conservative government angered Germany in early June when Harper and Finance Minister Jim Flaherty said Europe has the resources to deal with its own crisis, and Canada would not be contributing money to help with any bailout.

Canada and the United States ended up being the only G20 countries not contributing to a $450-billion pot managed by the International Monetary Fund for European states that needed emergency financial assistance.

Germany has argued the more countries that contribute to the pot, the more much-needed stability and confidence will be injected into European markets.

The German Embassy official said Merkel, who has been squeezed between the need to prevent a European financial meltdown and growing anger within her own country over taxpayer dollars being pumped into weak countries with no end in sight, will raise the issue with Harper.

International Trade Minister Ed Fast reiterated Canada’s refusal to contribute when the German leader’s visit was announced last month.

Schwanen doesn’t expect the Harper government’s position to change.

“Perhaps if there was a credible plan that was endorsed by Germany, then Canada might chip in,” he said. “But what we’ve seen is band-aid solutions.”

If nothing else, Merkel’s visit will provide an opportunity for the two leaders — both of whom have been preaching a message of fiscal austerity to tackle Europe’s soaring government debt and stagnant economic growth — a chance to brainstorm.

“What you will have is two of the world’s strongest economy’s meeting,” Schwanen said.

with files from Jordan Press, Postmedia News


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Canada's Prime Minister Stephen Harpera and German Chancellor Angela Merkel in this 2010 file photo.

Canada's Prime Minister Stephen Harpera and German Chancellor Angela Merkel in this 2010 file photo.

Photograph by: REUTERS, National Post


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