Davos 2012: Stephen Harper To Call On Europe To Act Quickly On Debt Crisis

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DAVOS 2012 STEPHEN HARPER
Participants at the World Economic Forum (WEF) annual meeting chat under a sign on January 25, 2012 at the Congress Center in Davos. (FABRICE COFFRINI/AFP/Getty Images) | AFP/Getty Images

DAVOS, Switzerland - There's one key thought Prime Minister Stephen Harper and other government leaders at the economic brainstorming sessions keep hearing over and over again: it's time to challenge the status quo of capitalism.

So far, they've shown few signs of heeding the call.

The founder of the annual World Economic Forum retreat in this Alpine town, Klaus Schwab, has appealed to global movers and shakers for a "great transformation" that would challenge the basic tenets of capitalism.

Other leaders of global organizations, including Bank of Canada Governor Mark Carney, have issued a joint "call to action" asking country leaders to fuel growth and jobs in a way that confronts chronically high youth unemployment, is environmentally sustainable, and also deals with inequality.

And Harper heard a similar message from some of the Canadian business leaders in his roundtable meeting on Wednesday afternoon. He was told that doing business is not just about making money but is also about bolstering Canadian society, confirmed participant Monique Leroux, chief executive of Desjardins Group.

But the opening speech of the forum on Wednesday was all about status quo.

Throughout the recent bouts of financial crisis, "our market economy has proved itself," said German Chancellor Angela Merkel.

She said Europe is inclined to work together to resolve the continent's sovereign debt crisis, but she stuck to her script and did not commit major new money for a rescue fund.

"I think we have shown in many ways that we are serious," she insisted.

But she told the forum she did not want to make promises she couldn't keep — despite intense pressure from Canada and the rest of the world to inject large amounts into the bailout.

She did suggest Germany would play an active role in keeping the eurozone afloat, but said finding solutions would take time.

"We are no longer deluding ourselves."

Officials said Harper kept up the pressure on Europe in a bilateral meeting with Denmark's prime minister, Helle Thorning-Schmidt, who holds the presidency of the European Union this year. He warned her that Europe's failure to act boldly is harming the global economy, officials said.

He'll follow up on Thursday with a keynote speech to the forum.

But Harper has not shown any sign of entertaining thoughts of fundamental transformation. He is a keen defender of free markets and the capitalist system, his officials say — especially since he believes it has worked so well for Canada.

Large Canadian companies already do their fair share of making sure the benefits of business are spread equitably across Canada, added John Manley, president of the Canadian Council of Chief Executives.

"The real underlying malaise here is, the problems much of the world's economy is having with growth. You know, you're always going to have a problem with the distribution of wealth if you're not creating it."

The federal government does its bit by promoting trade and investment, and making sure the government's books are in order, Manley said.

Harper's two-day trip to Davos is important, he said, because "for Canada it's a chance to say, we have found solutions. It's a positive message on investment, on international trade, on the importance of balanced finances. It's a necessary message, and a message that Canada is well placed to deliver."

He stressed that despite widespread recognition that Europe is falling into a recession and could easily drag the rest of the world down with it, many companies are flush with cash, especially in Canada.

But Harper and many a global leader have bemoaned the fact that many of those companies are sitting on their wallets, waiting for the investment climate to improve. Their investment heft is needed especially now that many governments are riddled with debt.

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