We meet today in an environment where there is certainly enhanced scrutiny by investors on the fiscal positions of all governments: federal, provincial, advanced economy or emerging markets. A premium is placed on fiscal sustainability. That means credible paths back to a budget balance level that is consistent with a sustainable level of debt. Depending on the starting point that can be a balanced budget, it can be a surplus, or it can be a small deficit. It depends on the initial stock of debt and the underlying strength of the economy.
So there is no question that sovereign risk is bearing heightened scrutiny by investors and that a variety of governments around the world, particularly in the advanced economies and across the G-7, are challenged with getting this right and getting the balance of the path of l'assainissement budgétaire, the consolidation of deficits, on the right path. I would note that one of the challenges that face some of the major European economies that are most in the sights of the markets is that there is the challenge of the pace of growth of expansion of nominal GDP, which has a pro-cyclical impact on efforts to reduce deficits and makes it even more challenging for them. One needs to look through to the underlying measures that are taken.
That said, to put Canada in context, Canada is in a leading position within the G-7 in terms of our combined government finances. If you look on a net debt-to-GDP ratio, it's lower than all other G-7 countries. Our deficit path is second to Germany. Given the underlying growth of the economy and measures that have been taken at all levels of government, federal and provincial, there is a strong sense of confidence in markets that is evidenced in our spreads on our bonds to other international bonds, on our spreads on credit default swaps, a strong level of confidence in the credibility of those plans.