Merkel in Canada

Canadian Foreign Affairs Minister John Baird greeted Merkel at the airport on Wednesday as she arrived for her first bilateral visit in Canada. She was accompanied by five economists who will attend talks expected to focus on economic cooperation as well as foreign policy concerns.

Shortly after touching down Merkel was whisked to Prime Minster Stephen Harper's official country retreat where the two will reportedly attend an informal evening meal. The two-hour dinner will serve as a warm-up for a formal meeting with Harper which is scheduled for Thursday morning.

Germany and Canada are both members of NATO as well as the G8 and the two nations traditionally have a close ties. A senior aide to the German chancellor has said she and Harper "speak on the phone regularly and have a close, trusting relationship."

Differing views

Nevertheless Merkel's visit could put that relationship to the test, with Canada and Germany split on how to tackle the European debt crisis.

While Germany acts as a financial backstop for struggling European nations, Canada is yet to fund the International Monetary Fund bailout for Europe. Indeed just hours before Merkel's arrival Canada's finance minister said Ottawa would not reconsider its refusal to assist Greece, Italy and Spain.

"It's not necessary for Canada to use Canadian resources to help solve the European problem, given that the European countries are among the wealthiest in the world," Canadian Finance Minister Jim Flaherty told reporters.

Flaherty went on to warn that "continuing economic headwinds from outside the country could easily throw us off course." He linked this to Europe's debt woes: "Not enough has been done. They need to do much more," the finance minister said.

ccp/jm (dpa, Reuters)