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IMF chief wants Canada’s economic policies to ‘go viral’

Create: 09/19/2016 - 21:27

While Prime Minister Justin Trudeau has a reputation as a “viral” politician for his mastery of social media, International Monetary Fund managing director Christine Lagarde says she wants his economic policies to be the next thing that spreads like wildfire.
“I really very much hope that Canadian economic policies can actually go viral,” Lagarde said in the foyer of the House of Commons after meeting with Trudeau on Tuesday. “And that this energy and this passion for openness can be sufficiently contaminating, including for the European Union.”
The IMF head said economic growth has been “too slow for too long” and the IMF advocates a “three-pronged approach” from governments trying to kick-start the global economy.
She said the Trudeau government is following that approach with monetary, financial and structural reforms that will mobilize the resources of the state to increase growth.
An endorsement for CETA
Lagarde also expressed support for CETA, the Canada-EU Comprehensive Economic Trade Agreement, which is still in the complex process of ratification.
The trade agreement is expected to remove 98 per cent of EU tariffs on a wide range of Canadian products, with reciprocal reductions in Canadian tariffs. “Given that this trade agreement seems to be a very reasonable, very sensible and a very good deal between the partners, I would hope very much that it can be completed, agreed, put to bed and implemented.”
CETA was negotiated by the previous Conservative government resulting in an agreement in principle in 2013, but the deal has yet to be signed. Since taking office, the Liberals have advocated for the “gold-plated” trade deal. They also negotiated amendments to the investor protection provisions of the previous deal in February.
A signing ceremony has been planned for October in Brussels contingent on a positive vote in the European Parliament, but the deal still faces significant opposition in Germany and some other EU member countries.
‘A little bird’
Lagarde also applauded Trudeau’s commitment to gender parity in his cabinet and in Canada’s international representation, teasing the prime minister about an upcoming appointment to the IMF board.
“A little bird actually told me that of the 24 chairs of the IMF, the Canadian chair — as of beginning of November — might be one of the very few, if not only, chairs occupied by a woman,” Lagarde said at the end of her prepared statement. “I don’t know if that little bird is right, but I very much hope it’s the case.” Lagarde then turned to Trudeau and asked if the little bird was right.
“Yes,” a smiling Trudeau answered.
The meeting was a followup to a meeting between the IMF head and Trudeau earlier this month at the G20 summit in Hangzhou, China.
NEB disarray
While Trudeau was basking in Lagarde’s praise for his economic policy, he also faced questions about whether his government can get approval for what is seen by many as a key economic priority: a pipeline to carry Alberta oil.
The National Energy Board panel that was reviewing TransCanada’s Energy East proposal resigned en masse last week after protests interrupted hearings in Montreal.
“It’s up to a process that quite rightly shouldn’t be about politics and should be about what’s right for Canadians, what’s right for our future,” Trudeau said. Trudeau repeated that the previous government was a “cheerleader” for projects rather than being a “referee,” which kept projects from getting the necessary public support for approval. As for whether his government supported the proposed Kinder Morgan Trans Mountain pipeline through B.C. or any specific route, Trudeau would not commit. “There’s always going to be speculation by one side or the other about what we might do,” he said. “But what we’ve actually said is we have a rigorous process by which these decisions will be made in a way that reassures Canadians that we’re doing the right things for growth and for jobs, while we do the right things for the environment.”
Threat of global economic collapse over for now: Lagarde
International Monetary Fund chief Christine Lagarde said Thursday that the threat of financial collapse in the global economy appears to have eased. But she warned that developed economies still need to follow through on financial reforms and debt reduction.
“We stopped the collapse. We should avoid the relapse. And it’s not time to relax,” she said in a press conference on her outlook for 2013.
Lagarde said that big economic powers, including the U.S. and European countries, had taken important steps to shore up their financial systems but have a lot of work left to do. She warned against a waning commitment to regulate the financial sector, despite the severe problems that began with the collapse of U.S. financial institutions in 2008.
She said that reforms have been delayed and diluted, and she worries that banks are pushing back against necessary reforms. In Europe, Lagarde said she sees a lot of progress on reform. She said the European Union has a lot of new tools to deal with financial crisis. She added that the EU still has work to do on its banking union in order to prevent future problems.

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