As Europe wobbles, will we lean back toward the States?

It seems like there's a headline and a deadline a day on the Euro crisis, and the European crisis, and the effect that a collapse there might have on Canada.

Reporters here have turned to Ottawa for official signs of how the Harper government intends to steer Canada through the coming turmoil. To date, that's meant promising restraint yet flexibility, holding interest rates to their present rock bottom and continuing to pursue trade deals wherever we can find them.

But as the clouds darken over Europe, some of that may change.

The Toronto Star's Tom Walkom has an interesting take on what all this might mean.

Walkom argues that nothing is getting much better in Europe, that the short-term effects for Canada will be punishing and that the long-term effect might be to tie us even more closely to the United States.

Our banks will hurt when Europe's do, Walkom says, and our important markets in Europe will hurt too, as the EU falters.

"Harper is angling to make a free trade deal with the European Union his most important legacy," Walkom writes.

"But fear tends to force countries back into well-worn grooves. A year ago, with the U.S. economy faltering, increased trade with Europe seemed the way of the future.

"Not so today. Europe is faltering. China remains opaque. For Canada’s politically important business classes, a retreat to Fortress America may seem the safest option."

Which is not only interesting, but sad, given the added kick that America has given to an already nasty financial climate. The U.S. dug itself out of trouble in part by printing more money. Because the world buys and sells in U.S. dollars, pretty much everything went up in price accordingly. Oil, for example, should be about 40 per cent cheaper than it is now, but for the drop in value of the US dollar.

Give Walkom's column a read. As always, he provides a lot to think about.