Focus shifts to Europe's economy as prime minister ends London trip

PARIS – While in London this week, Stephen Harper dined with his cost-cutting soulmate, British Prime Minister David Cameron.

On Thursday morning, he meets another European leader cut from a very different cloth.

In Francois Hollande, Harper will find someone with opposing ideas on how to best cure what ails Europe’s sickly economy.

The new president of France believes in spending and investment to encourage growth. He has promised to turn on the spending taps as a way to solve Europe’s crippling public debt crisis.

That view is in stark contrast to Harper and Cameron’s calls for Europe to stick to a strict austerity diet.

So it seems likely Harper will stress to Hollande the need for fiscal restraint.

Ahead of a meeting with business leaders Wednesday in London, the prime minister all but hinted as he would broach the subject the following day at the Elysee Palace in Paris.

“As you know, a lot of attention has been paid, and will continue to be paid in the days and weeks to come, over the situation in Europe,” Harper said before his meeting.

“But in Canada in the past couple of years, as the turmoil has continued in various parts of the world, we’ve tried to focus on what we can do to sustain growth in the Canadian economy over the mid- and long-term.

“We have fairly aggressive plans to maintain a strong fiscal position, not just in the years to come but in the generation to follow. We’ve taken aggressive fiscal consolidation measures over the long-term.”

He said Canada has been focused on sustaining its own economic growth and taking an aggressive approach to keeping costs under control.

In keeping key interest rates steady on Wednesday, the European Central Bank gave no indications that it would lower the rate next month to stimulate a weakening eurozone economy, or approve more stimulus measures.

Hollande’s views on how to solve the debt crisis veer off from those held by some other European leaders, including Cameron and German Chancellor Angela Merkel.

Hollande, the first Socialist leader of the country in 17 years, defeated incumbent Nicolas Sarkozy on a promise to renegotiate Merkel’s pact enshrining public spending limits throughout the European Union.

Harper has preached austerity. In that message, he has found a kindred spirit in Cameron.

It’s unclear if the two spoke at any length about Hollande or the European debt crisis more generally during their dinner at 10 Downing Street with their wives and New Zealand Prime Minister John Key and his wife.

The British prime minister, who was elected in 2010, instituted deep cuts to the public service after inheriting a deficit that stood at 10 per cent of GDP.

Harper’s Conservative government has similarly taken an axe to federal spending.

One of the business leaders who met Harper echoed the prime minister’s call for Europe to take swifter action to resolve its debt crisis.

“Uncertainty is a killer for business; it means that investment can’t move forward and you’re never quite sure where the bottom is,” said Robert Brant, president of the Canada-United Kingdom Chamber of Commerce and managing partner with Canadian law firm McCarthy Tetrault.

“When you’re never quite sure where that bottom is, then it makes it very hard to plan anything. So a lot of business people are waiting and hoping that whichever way things go, there’s some sort of conclusion.”

Back in Canada, interim Liberal Leader Bob Rae said Harper should not lecture the Europeans about fiscal integration when he has not held a meeting with all the provinces since he became prime minister.

“This to me is unbelievable chutzpah on the part of the prime minister,” Rae said.

“The Europeans have had more meetings in a week than we’ve had in six years and he has the gall to tell the Europeans how they’re supposed to do business? It’s outrageous.

“Mr. Harper’s pretending as if somehow he can present himself as the model of how to run something. Well, if he was running Europe, the place would’ve fallen apart completely and entirely. He would run it like Louis XIV.”