German Chancellor Angela Merkel is reiterating her call for fiscal discipline in Europe by praising Canada for not "living on borrowed money" and saying Canada should serve as a model.

Merkel arrived on Parliament Hill in Ottawa on Thursday for meetings with Canadian Prime Minister Stephen Harper. She had dinner with Harper Wednesday.

In a statement posted on the German government's website Merkel lauded Canada for its fiscal discipline, saying "this is also the right solution for Europe."

She will hold a press conference later. Merkel and Harper share the view that austerity, and not more government stimulus, is necessary. Canada's finance minister noted Wednesday that Canada has reduced its deficit in half since 2009 and is on track for a balanced budget at a time of relatively modest growth.