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morning buzz

No one is panicking - yet. In Canada, political leaders are picking their words carefully as they wait to see how this latest financial crisis will unfold.

Still, there is concern among the opposition about the Harper government's approach to this potential global economic crisis.

"Avoid panic. Also avoid complacency," advised Interim Liberal leader Bob Rae. "Right now I fear the government is coming too close to complacency."

Worried about a second global recession, the Liberal's Treasury Board critic John McCallum, a former senior bank economist, is urging the Conservatives to develop a "Plan B" – and delay "all or some" of its $4 billion in expenditure cuts.



The cuts, being overseen by Treasury Board President Tony Clement, are to be announced in the 2012 budget, expected in about six months.

"It would make no sense to cut spending and lay people off at a time of rising unemployment," argues Mr. McCallum.

Peggy Nash, the NDP MP and official opposition finance critic, also asserted the government should rethink its plan to cut $4 billion through its strategic review, cuts that could result lost jobs and higher unemployment.

Meanwhile, Finance Minister Jim Flaherty, who spent part of his Sunday on conference calls with his G7 counterparts, would not give interviews nor would anyone else in the Harper government comment.

Rather, late Sunday evening his office issued a statement in which Mr. Flaherty said the government was "confident that the appropriate actions have been agreed in order to ensure ongoing financial stability and growth."

He was referring to the commitment he took with the other G7 finance ministers and central bank governors to "coordinated action to ensure liquidity and to support financial market functioning, financial stability and economic growth."

In addition, he said he supported the move by the European Central Bank to buy government bonds, which is aimed at helping Italy and Spain find a way out of their financial mess.

Mr. Flaherty said, too, he is monitoring the situation "closely" and is in "close contact" with Bank of Canada Governor Mark Carney.

In another statement issued by Mr. Flaherty over the weekend responding to the huge losses in international stock markets last week, the Finance Minister said Canada is "well-positioned to face global headwinds."

He tempered that, however, that Canada is "not an island" and may eventually be affected by the situation, given the problems in the U.S. following the credit downgrade by S&P and the situation in Europe.

This is in contrast to Prime Minister Stephen Harper, who bragged during the recent election campaign, that Canada is "an island of security and stability" amid "disaster in the Pacific (referring to the tsunami in Japan), chaos in the Middle East, debt problems in Europe, and of course the very serious challenges south of the border."

"Canada is the closest thing … that this world has to an island of security and stability," he had said.

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