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Group of twenty nations -- meeting this weekend in Canada.
And the minister of finance for the host nation is warning the other governments of the importance of getting their fiscal houses in order.
As we mentioned earlier this afternoon we asked James clarity of what he hopes -- nations will take away from the sound.
Well the big thing is fiscal consolidation which means.
Getting gets sorted out and under control in certain countries particularly some of the European countries it's mandatory it has to be done.
Because it's endangering -- confidence and economic growth now ironic.
-- we have the president last week.
-- some of the G-20 company countries about spending more saying that in facts.
Until -- out of the economic doldrums we're still stuck here and we should be spending more on fiscal stimulus.
To a country that's prided themselves over the past fifteen years in getting their fiscal.
Stayed in order what would you respond to the president.
-- I -- agree with them I think there's sort of three groups of countries here one group -- reading easier to have some order because it's urgent.
And and what you think they need to be spending more money right no I think they need to be restraining -- -- Greece and certain -- for you disagree with the president well that's the first -- the second -- -- Countries that need to.
Control their spending over time but they don't need to do a dramatically immediately they can do and and over moderate pace.
And then the third group are emerging economies and economies like Canada where we have significant consumer demand still.
China needs to increase its domestic demand also to help the world economy they're already doing -- so that's going in the right direction.
You've got to have some frustration though with countries that got completely out of control.
It's it's not comfortable the sickness but we the United States were among them.
With our banking system what do you think Canada didn't get swept into the tsunami of disastrous financial crisis.
Well first thought home mortgages are banks hold the mortgages.
They didn't pass them along and securitize -- they know their customers.
They have strong retail branch changes that require or was it just a choice well and it's the way the banking system is involved but we also effectively supervise them.
Mean we're all over our banks and insurance companies to make sure that they.
That they do what they're supposed to do and we have strong capitalization rules and strong limits on leverage.
And that's what we hope the G-20 -- agree to -- it is very important that we get that fundamental issue of financial reform right.
-- taxes isn't the fundamental issue the big fundamental issue is capital rules and leverage rules.
-- slice the micro I like the macro want to pull back again and look at how you've got your fiscal house in order.
Because you are shining examples fifteen years ago when the Wall Street Journal.
Had an editorial titled bankrupt.
Canada suggesting and I'm quoting the journal from fifteen years ago that Canada has become an honorary member.
Of the third world in the -- imagine ability -- debt problem.
Now you could say the same about us.
Well -- you know we we had.
The bite the bullet back and saw how they generals.
And reduce spending.
Tightened austerity budgets.
Cut back on some social programs.
I'm all of the things governments have to do if if they're going to be able to move forward.
And and and balance over time so we got to balance budgets but it was wasn't without pain.
Did you find that because Canada has a completely different health -- structure that.
That that has actually helped the financial situation or is it straining at the scenes.
And perhaps you need more government money.
Well it's a challenge always with health care because it grows year after year regardless of how the economist -- so that's that's a challenge.
-- but it's stable right now it's manageable.
In Canada now and we're OK on the health care side but we have to do is manage and make sure it doesn't get out of control over time.
How do you think president Obama's is going to be treated -- when he's at the G-20 conference because again.
Lot of folks like candidates say hey we should be spending less money not -- -- I and I think it it's going to be a great weekend actually I think we're gonna make progress on fiscal consolidation.
Present Obama's put -- some targets.
Our prime minister has to we -- -- get some concrete results just -- -- verbiage coming out of the G-20 so we'll have some things as they tolerate over the next few years.
Half our deficits for example let's all cut our deficits and half of the huge accomplishment -- it's actually something we actually did it.
-- but it looks like that that opportunity is and a financial sector reform agree and some principles of a resolution -- bank crisis I think that's possible.
Canada's minister of finance James flirting in and of course they pick up the props for not getting all sucked into the drop.
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