Canada gains from Europe's chaos

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Canada is poised to take a stronger position on the world stage amid European financial troubles. (VIRGINIA MAYO / THE ASSOCIATED PRESS ARCHIVES)

PARIS -- With most of Europe trapped in a bleak cycle of economic deterioration and despair, Stephen Harper's assertion Canada is "a great nation rising" has a special resonance here today.

"Canada is number one," the editor of France's usually patriotic L'Express magazine gushed in a special edition this month that encouraged its readers to immigrate not only to Quebec, but to every corner of the country.

Similar thoughts have been expressed by many ordinary Europeans during a trip I just took by rail and sea from Greece, Italy and Spain to Germany, Norway, France and Britain. Word is filtering out Canada is one of the few western countries with solid finances and an optimistic long-term economic outlook.

Canada has never presumed it was or could be the economic equal or superior of Spain or Italy, let alone France, Britain or Germany. But with much of Europe in what looks like terminal decline and Asia keen to purchase staggering amounts of Canadian natural resources, one way or another Canada is going to end up with a more influential role in the world.

The crushing 10- and 13-digit numbers (billions and trillions) that describe Europe's stupendous debts have begun to have an effect. Canada's books -- while hardly pristine -- are far cleaner than those of every European country except Norway and perhaps Germany. The Bank of Canada trimmed its growth estimates a bit for Canada this week, but this is like a hiccup compared to the squeeze Europe's contracting economies face.

Recent headlines from European newspapers hint at the storm.

Spain is in the danger zone. Eurozone is warned 4.5-million jobs are at risk. Spain is bigger, scarier and harder to solve than Greece. Britain facing zero economic growth. Hollande paints bleak picture of French economy. Monti Says Italy Faces War. Italian Debt Still Hangs in the Balance. Portugal: Please switch off the lights when you leave.

There are so many dire forecasts out there today about so many different countries it is impossible to track or measure them all. Or their dramatic consequences for pensioners, schools and hospitals.

The British army is losing 20,000 soldiers and must abandon or amalgamate many of its storied regiments. Hospitals were closed in Portugal for several days last week because of strikes by medical staff protesting health-care and wage cuts. France's Peugeot is to close one of its biggest car-manufacturing plants. Bargain-hunting Chinese are buying prime vineyards and much else at discounted prices across the continent. Qatar -- whose women appear in very conservative Islamic dress in public -- is purchasing Italy's Valentino design house. Rich families from Greece and Italy are boosting already sky-high real estate prices in London's fanciest boroughs as they scramble to find a comfortable bolt hole for their fortunes. The top civil servant in Britain, where the debt will reach more than $2 trillion in four years, claims a decade of spending cuts is coming.

Life is grand in oil- and gas-rich Norway. Danes are thriving. Germans are doing well, too, although they are full of angst over how so many of their European Union cousins have designs on their money. The south is a wreck everywhere, with youth unemployment at catastrophic levels. Many, perhaps most, businesses that still survive there are reeling.

The fear, and it is expressed more often now than when I was in Europe six months ago, is not whether but when Europe turns from anger to mayhem. Frustration is already spilling over in Athens. Despite a huge, constant police presence, there have been riots. Economic and genuine refugees from the Third World have become easy initial targets of right-wing extremists.

Twice earlier this week in Madrid, I was trapped in whistle-blowing flash mobs. As riot police watched and followed, thousands of protesters marched down the Gran Via and through the grand plazas of this imperial city, declaring their opposition to drastic austerity measures announced last week to lower Spain's budget deficit by $80 billion. The unwelcome calculations include a hike to 21 per cent of what Canadians would call the GST; sharp cuts to unemployment benefits; and an across-the-board seven per cent cut in civil service wages that includes King Juan Carlos I and his family. In an ominous new development, many individuals are to lose their savings, having trusted their money to banks that made improvident investments.

Some economists believe Europe has not yet gone nearly far enough to address its problems. Others are convinced spending more money is the only way out of the crisis.

Whichever school is right, there is general agreement the continent's downward arc has only just begun. It is inevitable Canada -- by virtue of relatively prudent fiscal management and nature's generous bounty -- will take on greater responsibilities and have more influence because it is one of the few western bulwarks in a time of widespread economic gloom.

Matthew Fisher is a columnist

for Postmedia News.

Republished from the Winnipeg Free Press print edition July 21, 2012 J11