Japan PM to mull bold steps for economy - agency
07:04 p.m Apr 03, 1998 Eastern
LONDON, April 3 (Reuters) - Japanese Prime Minister Ryutaro Hashimoto
vowed on Friday he would consider bold fiscal and financial measures for
Japan's economy and that he would do what he must to revive it, Jiji
news agency reported.
Hashimoto, speaking exclusively to journalists who accompanied him to
the Asia-Europe (ASEM) summit in London, was responding to calls for tax
cuts vociferously urged by prominent officials at home and abroad.
''I would like to consider specific measures which have both real
substance and impact, with fiscal and financial measures at the core,''
the Japanese news agency quoted Hashimoto as saying.
''In view of the current economic situation (in Japan), we are thinking
about what it really needs...We will do what we must do and take bold
action.''
His comments follow a stream of shocking news on the Japanese economy in
recent days, which prompted U.S. President Bill Clinton to urge Japan on
Friday to break with its past and take bold action to revive its
economy.
Clinton described a ''raging battle'' between Japan's bureaucracy and
its business community on the policies needed to bring the Japanese
economy out of its moribund state.
A recent survey by Japan's central bank showed the nation's business
sentiment was at its worst in three and a half years. The chairman of
Sony Corp said earlier in the week that Japan's economy was ''on the
verge of collapse.''
The latest blow came earlier on Friday when credit rating agency Moody's
sounded a warning note on Japan's sovereign debt rating of AAA, the
highest possible. Moody's changed its outlook on Japanese debt from
stable to negative.
It said its action was based on the uncertainty of Japanese authorities'
ability to achieve a policy consensus that would help the economy.
Also on Friday, Japan faced renewed pressure to cut taxes to
reinvigorate its economy, which has been struggling for years. European
Commissioner Sir Leon Brittan called for Japan to implement ''permanent
and substantial tax cuts.''
The United States has often repeated this chorus, as have many
politicians and business leaders in Japan.
On the issue of tax cuts, Hashimoto stopped well short of making any
commitments.
But he expressed his willingness to reconvene in the near future his
fiscal reform council -- a panel which he heads himself and which last
year devised a law which required the government to cut down its
snowballing budget deficit.
This was the result of his administration putting great emphasis on
improving the nation's fiscal condition, and so the government is
currently in a straitjacket as far as tax cuts are concerned.
But resumption of a debate by the reform council could give him the
political cover to cut taxes and yet avoid an about-face on policy.
''After the budget for fiscal 1998/99 is enacted, I would like to
convene the Fiscal Structural Reform Council as quickly as possible,''
he was quoted as saying. Japan's national budget for the fiscal year
ending March 31, 1999 is due to be enacted on April 18 at the latest.
He warned, however, that tax cuts must be considered in a broad context.
''What measures to take on taxes and when to implement them -- this must
be judged taking into account the issue of fiscal reform, the state of
the economy, consumer spending, company profits and the Asian crisis,''
Jiji quoted him as saying. REUTERS |
