G7: Fiscal union in Europe to help solve crisis

Do you see... Spain crisis = Fiscal Union

OTTAWA • After months of political rhetoric and fiscal sabre rattling, European leaders are being prodded by the world’s biggest countries to finally tackle the region’s debt problems before it is too late.

With Spain finally admitting it needs help to save its banking sector, finance chiefs of the Group of Seven industrialized nations on Tuesday pledged to help Europe look for ways to resolve its fiscal crisis.

That followed a conference call by G7 finance ministers and central bankers, which Finance Minister Jim Flaherty had announced the previous day to reporters in Toronto.

Bank of Canada governor Mark Carney was also on the Tuesday call.

For its part, Canada issued a statement after the call echoing those goals but also offering no firm action.

The U.S. Treasury, which chaired that meeting, said in a statement that the G7 discussed “progress towards a financial and fiscal union in Europe” and agreed to monitor developments closely. No other details on the talks were released.

The larger G20 group of countries will hold its scheduled meeting in Mexico on June 18 and 19.

“They (G7 chiefs) agreed to monitor developments closely ahead of the G20 summit in Los Cabos,” the Canadian statement said.

The Bank of Canada did not issue a statement on the talks.

But Prime Minister Stephen Harper, in an interview with CBC’s chief correspondent Peter Mansbridge in London, said, “I don’t want to sound too alarmist, but we are kind of running out of runway here.

Financial Post