Eurozone needs overhaul to end crisis, Harper says

PM discusses region’s future with French president

PARIS — Prime Minister Stephen Harper called for an overhaul to the eurozone Thursday and urged European leaders to move “decisively” to resolve the continent’s economic crisis before it spreads to the world.

The prime minister made the public plea after meeting François Hollande, the new French president who has rejected international pressure to impose austerity and has moved to provide a more generous pension system for some of his citizens.

Harper said Europe must fix the structural weaknesses of the 17- nation eurozone that make the monetary system unable to adapt to crises. Harper said the eurozone and European Union lack the “strong institutional structures” that normally are associated with a monetary union.

“I think most observers recognize that these things have to change. This is kind of a half- done project. As long as it’s a half- done project, they lack the tool to deal with crises.”

Harper acknowledged that it is not a simple problem, nor will it be easy to fix.

“But we don’t have years to fix this problem,” he told a news conference. “There has to be a plan.”

Harper confirmed that during a 45- minute meeting with Hollande at the French presidential palace, the two men discussed the increasing uncertainty about the future of Europe — whether the continent can prevent its economy from falling into further collapse and whether the eurozone currency can be kept alive.

Afterward, speaking to journalists, Harper’s frustration with the lack of action by Europe was evident.

“My position has been very clear,” said Harper, who began urging Europe last year to get its debt crisis under control. “Over the past year, as you know, 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.

“But, as you know, the overall situation has worsened, and I emphasize once again the necessity of acting decisively to contain this problem before it becomes a true global crisis.”

Harper’s trip to Europe comes at a crucial juncture.

Greece goes to the polls June 17, and it’s possible voters will elect a party that has spurned the austerity measures proposed by the previous government in return for a bailout by the rest of Europe. If that happens, Greece will almost surely leave the eurozone.

Europe’s political leaders are searching desperately for a consensus on how to face that scenario and the possibility that other debt- ridden nations, such as Spain, will experience a collapse of their banking system.

Hollande, a socialist, won power recently by promising voters he would reject the austerity policies of his rival, then- president Nicolas Sarkozy. The ideological gulf between him and Harper was drawn into sharp view just a day before Thursday’s meeting.

On Wednesday, Hollande unveiled plans to lower the retirement age to 60 from 62 for some French workers, reversing reforms instituted by Sarkozy. By comparison, Harper’s government is moving in the opposite direction on pension reform, planning to make future seniors wait until age 67 to claim the Old Age Security benefit.