Canadian Prime Minister, Stephen Harper, discussed the proposal of his government to have a free-trade agreement with the European Union with German Chancellor Angela Merkel, during a meeting in Ottawa.

Stephen harper

Prime Minister Harper said both parties would still conduct several rounds of negotiations this week. The Prime Minister wants to sign an agreement by the end of 2012, although he described his objective as “ambition.”

On the other hand, Chancellor Merkel said on her part, she would help step up efforts in order to reach a free-trade agreement between Canada and the European Union. According to the Chancellor, Europeans will consider the proposal the broadest they’ve ever signed.

The German Chancellor said, “There are a number of outstanding issues out there, but once I go back to Germany I will see to it that these negotiations come to a speedy conclusion.”  According to her, both Canada and Germany are convinced that a free trade is one of best engines they can utilize to boost growth in the midst of a global economic slowdown.

According to Canadian Finance Minister, Jim Flaherty, the Canadian government is still interested in pursuing the free trade agreement with the European Union, despite the existing financial crisis in the region, because it is the world’s largest market, based on the size of its middle class.

Despite the interest of the Canadian government to ink a free-trade agreement with EU, Prime Minister Harper reiterated the position of his government that it will not contribute to a global bailout package for Europe through the International Monetary Fund (IMF).

Harper and Merkel said the free-trade agreement is not dependent on Canada’s financial support for the euro zone bail out. Both leaders believe that austerity, instead of more government stimulus, is necessary to promote growth.

Harper said fiscal discipline and economic growth go together.

Merkel praised Canada’s economic management, and she believes it should be a model for Europe. She said, “Canada is an example of how one can emerge from the crisis in a robust way. You have a free trade system, you have sound budgetary policy, and you have quite strong rules in the banking system. If you look at the last global economic crisis, Canada has weathered this crisis quite well.”

She also reiterated the commitment of the European Union to maintain its common currency.