Obuchi and Opposition Parties
Set Pact to Aid Japanese Banks
An INTERACTIVE JOURNAL News Roundup
A plan to bolster Japan's troubled banking system was struck in Tokyo on
Friday, after days of haggling between ruling and opposition parties.
Full details of the package weren't immediately released, but Naoto Kan,
head of the opposition Democratic Party, told reporters that Prime
Minister Keizo Obuchi had agreed to many terms put forth by the
opposition.
Mr. Obuchi, who has faced considerable pressure to strike a deal before a
meeting planned in the U.S. with President Clinton next week, hailed the
agreement as good for the struggling Japanese economy and an important
step in resolving Japanese banks' problems with bad loans.
"Funds will flow smoothly to companies in need of funding and this will be
factor to perk up the economy," Mr. Obuchi said.
Asked if the latest plan, a revised blueprint which incorporates a number
of proposals offered by the three opposition parties, is better than the
government's original plan, he said, "Rather than say 'better,' no matter
how good a plan is, we have to pass it into law. Today's agreement was
the result of talks with the leaders of all three parties, and I think that's
great."
Another official of the Democratic Party said Messrs. Kan and Obuchi
agreed that bankrupt banks would be dealt with through nationalization as
well as other measures, on which he didn't elaborate. He said Long-Term
Credit Bank of Japan Ltd. would be put temporarily under state control.
The official said Messrs. Kan and Obuchi had agreed to set off the
Finance Ministry's power to set policy for the financial industry from its
fiscal powers, which it would retain. The necessary laws for this would be
passed in the next parliamentary session.
An official of the Heiwa-Kaikaku opposition group, which was included in
the agreement, said the LDP and the opposition agreed to aim for the split
of the Finance Ministry's powers to be carried out by June 1999.
Mr. Kan said the agreement covered all three opposition groups which
negotiated with the LDP on banking reform: the Democratic Party,
Heiwa-Kaikaku and the Liberal Party. But Liberal Party head Ichiro
Ozawa expressed dissatisfaction with the deal, saying that while his party
would participate in efforts to work out banking legislation, it didn't feel the
agreement was an adequate basis for the legislation. |
