French President Francois Hollande (R) welcomes Canadian Prime Minister Stephen Harper as he arrives at the Elysee Palace in Paris, June 7, 2012.
Credits: Philippe Wojazer/REUTERS
PARIS - Europe, you may have heard, is in flames.
And to the great surprise of Prime Minister Stephen Harper, who has spent the last few days on this side of the pond, there is hardly anyone here who will pick up a fire extinguisher.
"I understand these are not easy things to fix, but we don't have years to fix this problem," Harper told reporters here after emerging from a 45-minute meeting with French President Francois Hollande at the grand 18th century Elysee Palace.
"They're not going to have growth in Europe, as I told the president, unless they establish some confidence in markets. It's going to be very difficult to establish confidence without a plan to address some of these structural issues."
Hollande is the new kid on the European block. He was elected last month, becoming the first socialist to lead France in more than 15 years.
Hollande, along with the conservative German Chancellor Angela Merkel, are the two key eurozone leaders. They must be united in purpose and policy if Europe is going to douse its four-year-old smouldering fiscal crisis. If they fail, there is a good chance burning embers will escape this continent and begin fires on North American shores.
"Over the past year, the Europeans have taken a number of short-term steps to deal with problems that have come up and they have continued to successfully avoid some kind of catastrophic event," Harper said. "But the overall situation has worsened and I emphasized (to Hollande) once again the necessity of acting decisively to contain this problem before it becomes a true global crisis."
Spain is the latest European country to find itself in serious financial trouble. This week, Spain's Prime Minister Mariano Rajoy said his country is in a situation of "extreme difficulty" while his budget minister, Cristobal Montoro, said his government's fiscal situation is so dire that it "does not have the door to the markets open."
Naturally, they expect someone else to bail them out but, of course, Spain will only accept any assistance with as few strings attached as possible.
It's like this all over Europe. Political leaders want the cash but don't want the responsibility of imposing tough new measures to get their own fiscal houses in order.
They would much rather just have an institution like the European Central Bank (ECB) wave a magic monetary wand and make it all better.
To its credit, the ECB this week refused to do that. ECB president Mario Draghi - Europe's version of Bank of Canada governor Mark Carney - pretty much told the politicians Wednesday it's their problem to fix, not his.
"I don't think it would be right for monetary policy to fill (in for) other institutions' lack of action," he said.
"The problem here is that we have a monetary union, but the European Union and the eurozone lack the strong institutional structures that normally go with monetary union."
In other words, more political union is needed.
Right on cue, Germany's Merkel popped up on morning TV in her country Thursday.
"We need a political union first and foremost," she said. "Step by step we must from now on give up more powers to Europe, and allow Europe more powers of control."
Godspeed, chancellor. The flames are rising.