By Ken Mark, a freelance writer specializing in international trade and investment. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Recent financial market gyrations are not the result of a new crisis. It is the same old one from 2008. That is the insight Derek Burleton, Vice President and Deputy Chief Economist, TD Bank Group shared with attendees at the October 13th EUCOCIT Breakfast Seminar, “The EU financial crisis and its impact on Canada”.

He adds that this time a full economic recovery will take longer and be slower than for previous recessions. “We are about halfway through,” he says. “Markets will rebound. But we’re facing uncharted volatility.”

Burleton points to global worries over European sovereign debt as the main source of the market’s crisis in confidence. He contends that ‘ring-fencing’ Greece occurred too late so markets have already priced in a Greek default. The current yield on its two-year bonds is 62 per cent.

The great unknown, however, is the potential impact of the default on other Euro zone members such as Portugal, Spain and Italy as well as European and other banks holding their sovereign debt.

But Burleton indicates that the problem ultimately is political. “European leaders know where to go but not how to get there,” he says. “A major concern is setting aside enough money to get there quickly. But once a solution is in place, confidence will return and the EU economy will start to grow.”

Burleton also states that he sees little sign that the Euro crisis has negatively affected the Comprehensive Economic and Trade Agreement (CETA) negotiations between the EU and Canada.

He explains that the agreement is about more than just trade since it also includes finance and investment as well as the movement of workers.

As for the United States, it remains financially solvent but faces political gridlock. Its debt-to-GDP ratio is not high but it is deteriorating. Resolution may take a bit longer since the US must first get its fiscal policy house in order. For the time being, it can still borrow money at very low rates.

US housing remains a serious issue and may require some form of stimulus to get it back on track. Another concern  is that all three levels of government are slashing budgets to reduce deficits which in the short term will slow down overall recovery.

Canada remains an island of relative economic and financial calm thanks to stricter banking regulations and sound fiscal policies. Burleton notes that the high and growing level of consumer debt remains a concern. But short of another downturn, Canada’s economy will continue to grow as long as emerging and other markets keep buying our oil and gas, minerals and agri-food products.

As a result, the western  provinces are expected to lead the economic growth parade. The Bank of Canada will likely keep interest rates low. He forecasts that it will not raise rates until 2013  for fear of pushing up the value of the Canadian dollar and making Canadian manufactured exports less competitive.

Burleton’s final comment?  “Right now, markets have a huge thirst for hope.”