Wednesday, December 3, 2008

Stability & The Economy

The Government's rhetoric, over the last two days, has stressed the unstable element that a coalition propped up by the Bloc Québécois would bring to the country and its economy; at a glance, this would appear accurate. The Toronto Stock Exchange has seen its value fall steadily since the announcement of a coalition agreement on Monday, and its volatility has been higher than usual since rumours of a coalition began flying after the economic update on Thursday. This, however, is more appearance than reality.

The current instability of the government is causing trouble with the stock market; investors unable to know whether a divided parliament will continue past Christmas, whether government will be dissolved until spring while the country runs another election that may yield another dysfunctional House or whether the Governor-General will ask the coalition to step in and govern. I believe that the most likely desired result on the part of investors lies in either a Harper-less conservative government, or in the implementation of the Liberal-NDP coalition. The Bloc's commitment to the coalition would ensure rather than oppose the stability Harper claims he fears for so much from the Opposition's agreement.

In promising, within the context of a legally binding document, not to defeat a coalition government for 18 months, the Bloc has ensured that no one short of one of the governing parties could join the Conservatives in bringing them down - stability, thy name is coalition.

That they are promising, in addition to the measures implemented by the conservative government, to invest massively in Canada's manufacturing and agricultural sectors in order to protect them from the forecast economic downturn is yet another reason for investors to remain optimistic about a coalition being invited to form Canada's government. In fact, the most damaging thing the Governor-General could do for the economy at this point in time would be to okay another election.

1 comment:

MoneyBonanza said...
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