Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, October 14, 2011, from 8:47 a.m. to 8:56 a.m.)

[Questions & Answers]

Q.

Regarding the debate over whether or not Japan should participate in negations about the TPP (Trans-Pacific Partnership), do you think you, who are in charge of financial services and postal reform, should join the debate as an economic minister?

A.

As that issue was mentioned in newspaper articles today, I asked the Chief Cabinet Secretary about it. He told me - this was before the cabinet meeting - that I should join the debate, because I am the Minister for Financial Services and also because Mr. Kamei, leader of the People's New Party, has strongly requested my participation.

Q.

Participation in what?

A.

As you know, cabinet ministers have been holding study meetings on TPP. He said I should participate in those meetings.

Q.

As a member of the meetings, what arguments will you make from what standpoint?

A.

Naturally, I will make arguments with Japan's current and future national interests in mind.

The Lehman shock occurred in a world where globalization has proceeded very much on the one hand and deregulation has gone too far on the other hand. In Europe, which I visited last week, the financial and economic markets are very unstable as a lingering consequence of the Lehman shock. In the 17-country euro zone - although there are a total of 27 EU countries - Slovakia's approval (of the plan to expand the European Financial Stability Facility) has apparently provided breathing space. Underlying that problem is the broad wave of economic globalization, and in particular, Japan's economic and financial situations are closely linked to the global economy, as shown by the yen's appreciation. Therefore, we must keep that in mind when making our arguments and at the same time, we must remember that in any country, some industries are competitive while others are not. As I have heard the opinions of various business organizations and communities during the 26 years of my experience as a lawmaker, I believe that how to coordinate TPP with their interests and obtain their understanding is a very important issue.

At my press conferences in the past, you asked me about the possibility of postal affairs being discussed in TPP negotiations, for example. However, the United States, at least, has not presented any proposal related to postal affairs in relation to TPP, although two years ago, the U.S. and EU officials expressed various opinions about postal affairs. From the postal law, it is clear that the management independence of Japan Post and fair competition are legally ensured.

When I visited the United States in August last year, Undersecretary of the Treasury Brainard asked me about that point. I assured her that there is no violation of the spirit of the WTO as management freedom and independence, as well as equal competitive conditions, are legally ensured. In Europe and the United States, government officials have asked similar questions and the Japanese ambassadors have apparently replied along the same line.

While postal affairs are not a subject of discussion for the immediate future, finance is very closely related to the people's lives in a broad range of fields, as you know, so the Chief Cabinet Secretary said I should participate in the debate on TPP when I talked with him today. As Minister for Financial Affairs and as a state minister, I would like to express my opinions in a responsible manner.

Q.

Do you think that participation in the debate is necessary, generally speaking?

A.

As I am a cabinet minister, I think that it is naturally my duty as a cabinet minister in the Noda cabinet to participate in it as instructed by the Chief Cabinet Secretary.

Q.

It has been decided to strengthen the European Financial Stability Facility. How close to a solution do you think the European debt problem has come?

A.

I believe that that is a big step forward. Among the 17-euro countries, Germany posed the largest hurdle. The last holdout was Slovakia, which is a former communist country located in East Europe and is where per-capital national income is lower than in Greece - I am speaking from second-hand knowledge, to tell the truth, as I have not visited Slovakia - and people in that country are wondering why they have to bail out Greece, where income is higher. Therefore, the ruling coalition was divided, but a compromise has been reached following the cabinet's pledge to resign en masse and move up the date of a general election. That, I think, is a big step forward.

As to how close a solution is, the important thing is that all of the parties concerned should work hard, and that regarding non-performing loans, banks should increase their capital. If it is difficult to do so, the government should step in. If that does not work, the European Financial Stability Fund, the expansion of which has been approved by the parliaments of the euro-zone countries, should provide support. While that is the order of things, I think that the major hurdle has been cleared. Even so, as this is a matter of international relations that reflects the major trend of the time, I am keeping a close watch on the situation while actively gathering information from many quarters.

(End)