Arctic G7 meeting ends with a whimper

IQALUIT -- The Arctic meeting of global financial leaders over the weekend was as much about what wasn't said as what was.

While there was no shortage of photo opportunities for finance ministers and their central bankers -- dogsledding in heavy parkas, or casually clad at a fireside chat -- the two-day Group of Seven meeting ended with few words.

The G7 host, Finance Minister Jim Flaherty, delivered a brief closing statement that set directions but offered few details:

• Stay the course on economic stimulus spending until recovery is well entrenched, but there were no forecasts for stability;

• Push ahead with financial reforms, but no details were offered on how each country plans to level the regulator playing field, especially when it comes to bank capitalization, by the end of the year;

• Provide development and health-care aid for poorer countries, but only Haiti debt forgiveness and reconstruction were mentioned specifically; and

• Maintain G7 relevance as "first responders in an economic crisis."

On the debt crisis facing Greece, Flaherty said the situation "is largely a matter to be managed not by the G7 but by the European Union."

In a later interview with Canwest News Service, he added: "What we're talking about here is not threatening the world financial system."

Flaherty was less specific on foreign exchange concerns -- in particular, complaints that the Chinese yuan is undervalued -- telling reporters: "We discussed currencies, as usual."

Ahead of the Iqaluit meeting, there was much buzz about how European leaders -- who have banned the import of seal parts -- would react to the Inuit cuisine on offer.

But at the closing news conference, the European delegates were mum on the seal issue, leaving Flaherty to respond on their behalf.

"The European Union makes a specific exception with respect to the Inuit people who, for thousands of years, have relied on the seal as part of their survival, and that is the view of the European Union and it's certainly our view in Canada."

On Haiti, Flaherty confirmed that all G7 nations had forgiven Haiti's debt following the country's devastating earthquake Jan. 12, which killed more than 200,000 people.

The minister called on international lenders to do the same.

"The debt to multilateral institutions should be forgiven, and we'll work with these institutions and other partners to make this happen as soon as possible," Flaherty said.

"And we discussed the long-term reconstruction assistance that Haiti will need as it emerges from the current urgent situation as a result of the earthquake."

Douglas Porter, deputy chief economist at BMO Capital Markets, said: "It seems that the primary theme was that officials want to ensure that the recovery fully takes root."

"Whether it was pledging to continue with stimulus measures, calling for any new bank regulations not to be overly onerous, or making encouraging noises about Greece's deficit-reduction efforts, the main point seemed to be that G7 officials did not want to disrupt the fledgling recovery."

Porter added that "probably the biggest question for the markets, still, however, will be to what extent some of the troubled smaller European countries [most notably Greece] can actually follow through on deficit-reduction policies, especially in the face of an already-weak economy."