Jan. 26 (Bloomberg) -- Canadian Finance Minister Jim Flaherty said Europe can solve its debt crisis without new International Monetary Fund aid that would come at the expense of much poorer citizens in other countries.
“These are the wealthiest countries in the world, and you can’t expect a Chinese peasant earning $200 a year to contribute to bailing out Europe,” Flaherty said today in a interview at the World Economic Forum in Davos, Switzerland, on “Bloomberg Surveillance” with Tom Keene. “It doesn’t make any sense.”
The IMF said Jan. 24 that Europe’s debt crisis threatens the world economy and is seeking $500 billion in extra resources for potential loan demand. Private creditors and European officials today are negotiating an increase to the 50 percent cut in the face value of Greek government bonds agreed to three months ago, as the country’s shrinking output means that reduction may not be enough to avert an economic collapse.
“They can do it by themselves, and we have made that clear to them,” Flaherty said, referring to European policy makers.
“They have some good fiscal consolidation plans in place in Spain and Italy,” he said. “They have to make sure that they are enforced, that they actually do them, because there has been a problem with that as you know in Europe, and then they have to dedicate more resources.”
Flaherty reiterated the U.S. should allow TransCanada Corp. to build the Keystone XL oil pipeline linking Alberta’s oil sands to refineries along the Gulf of Mexico. President Barack Obama blocked a permit for the project earlier this month.
“We are disappointed in that, but we hope things will change over time,” Flaherty said, adding the project would create “skilled jobs at a time when we are all worried about jobs.”