Japan Promises Extra 3 Trillion Yen to Aid Economy
HORSHAM, England--Finance Minister Kaoru Yosano told U.S. Treasury Secretary Timothy Geithner that Japan would exceed the United States' request to implement stimulus measures equivalent to at least 2 percent of gross domestic product.
Meeting Geithner here Friday before the opening of the two-day gathering of Group of 20 finance ministers and central bank governors, Yosano said Japan would spend at least 3 trillion yen more to boost the economy.
To pull the world economy out of the current crisis, the International Monetary Fund has called on each country to take fiscal action equivalent to about 2 percent of its GDP. The United States has made the same request of other countries.
During the bilateral talk, Yosano assured his U.S. counterpart that Japan would spend 10 trillion yen, accounting for 2 percent of its roughly 500-trillion-yen GDP.
On the other hand, European countries such as France and Germany have taken a more cautious approach to making such a huge commitment.
According to a Japanese official, Yosano said to Geithner during their meeting, "It's important that all the countries coordinate their economic measures and make up for demand shortages."
Geithner agreed with Yosano, according to the official.
Since last fall, the Japanese government has come up with stimulus measures worth 12 trillion yen. On Friday, Prime Minister Taro Aso instructed the ruling coalition parties to consider additional measures.
According to IMF estimates, Japan's 2009 public spending on economic pump-priming measures will account for 1.4 percent of the country's GDP.
To achieve the 2-percent goal that the finance minister has pledged, the government needs to implement additional measures exceeding 3 trillion yen, or 0.6 percent of the country's GDP.
However, according to the Cabinet Office, Japan's demand deficiency is far more--about 20 trillion yen-- prompting the coalition parties to urge more public spending.
It remains to be seen how much more the government will spend on economic measures.
The two top financial officials also stressed during the meeting that in order to shake off the worldwide recession, economic recovery of emerging economies and Asian countries was essential.
To help these countries take pump-priming measures, Yosano and Geithner agreed the financial base of the IMF and the Asian Development Bank should be strengthened.
Also during the meeting, Yosano expressed his opposition to tightening regulations governing banks' capital-to-asset ratios--a measure that has been floated by some policymakers in order to maintain the sound financial state of each financial institution.
"We should give top priority to recovering from the economic and financial crisis. It's obvious that such regulation will lead to a credit crunch."
The G-20 includes the Group of Seven leading industrialized countries: Britain, Canada, France, Germany, Italy, Japan and the United States; and emerging economies such as the so-called BRICs: Brazil, Russia, India and China.
The G-20 meeting, which was held in preparation for the G-20 summit in London next month, closed Saturday.
Yosano, who doubles as state minister in charge of economic and fiscal policy, inherited the finance minister post last month from Shoichi Nakagawa, who resigned after appearing to be drunk at a news conference in Rome.(IHT/Asahi: March 16,2009)
Meeting Geithner here Friday before the opening of the two-day gathering of Group of 20 finance ministers and central bank governors, Yosano said Japan would spend at least 3 trillion yen more to boost the economy.
To pull the world economy out of the current crisis, the International Monetary Fund has called on each country to take fiscal action equivalent to about 2 percent of its GDP. The United States has made the same request of other countries.
During the bilateral talk, Yosano assured his U.S. counterpart that Japan would spend 10 trillion yen, accounting for 2 percent of its roughly 500-trillion-yen GDP.
On the other hand, European countries such as France and Germany have taken a more cautious approach to making such a huge commitment.
According to a Japanese official, Yosano said to Geithner during their meeting, "It's important that all the countries coordinate their economic measures and make up for demand shortages."
Geithner agreed with Yosano, according to the official.
Since last fall, the Japanese government has come up with stimulus measures worth 12 trillion yen. On Friday, Prime Minister Taro Aso instructed the ruling coalition parties to consider additional measures.
According to IMF estimates, Japan's 2009 public spending on economic pump-priming measures will account for 1.4 percent of the country's GDP.
To achieve the 2-percent goal that the finance minister has pledged, the government needs to implement additional measures exceeding 3 trillion yen, or 0.6 percent of the country's GDP.
However, according to the Cabinet Office, Japan's demand deficiency is far more--about 20 trillion yen-- prompting the coalition parties to urge more public spending.
It remains to be seen how much more the government will spend on economic measures.
The two top financial officials also stressed during the meeting that in order to shake off the worldwide recession, economic recovery of emerging economies and Asian countries was essential.
To help these countries take pump-priming measures, Yosano and Geithner agreed the financial base of the IMF and the Asian Development Bank should be strengthened.
Also during the meeting, Yosano expressed his opposition to tightening regulations governing banks' capital-to-asset ratios--a measure that has been floated by some policymakers in order to maintain the sound financial state of each financial institution.
"We should give top priority to recovering from the economic and financial crisis. It's obvious that such regulation will lead to a credit crunch."
The G-20 includes the Group of Seven leading industrialized countries: Britain, Canada, France, Germany, Italy, Japan and the United States; and emerging economies such as the so-called BRICs: Brazil, Russia, India and China.
The G-20 meeting, which was held in preparation for the G-20 summit in London next month, closed Saturday.
Yosano, who doubles as state minister in charge of economic and fiscal policy, inherited the finance minister post last month from Shoichi Nakagawa, who resigned after appearing to be drunk at a news conference in Rome.(IHT/Asahi: March 16,2009)
quoted from: The Asahi Shimbun
