TORONTO -- Federal Finance Minister Jim Flaherty took a swipe Friday at the struggling euro, which he claims is dragging down Canada's thriving economy.

"The key problem is in Europe, with the falling euro," Flaherty told reporters in Toronto. "The Europeans have still not dealt with their crisis."

He blamed the ailing euro for holding back both the Canadian and U.S. economies.

"It is a drag on the world economy," Flaherty said. "It is affecting our level of economic growth."
Even so, the finance minister said, the Canadian economy is performing better than most others.

"We have the strongest economy of all the G7 countries," Flaherty said.

"Canada has recovered and exceeded the number of jobs that we lost in the last recession."

He warned that the U.S. economy is still "sluggish" and the "global economic situation remains fragile and uncertain."

The Finance Department Fiscal Monitor released Friday said Canada's budget is closer to balance than it was a year ago.

Statistics Canada reported Friday growth for real gross domestic product in the second quarter of 2012 was 1.8% at an annual rate over the same time last year.