Japan facing a fall deadline
Source: Bloomberg News |
July 6, 2011, Wednesday
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Print Edition
Print Edition
JAPANESE Finance Minister Yoshihiko Noda said the government may run out of money as early as October unless a bill authorizing bond sales is passed in parliament.
"If the bill is not passed in the current Diet session, the seamless management of the budget beyond September will be difficult," Noda said at a press conference in Tokyo yesterday. "We've got our backs against a wall and need to do our best to avoid that situation."
Prime Minister Naoto Kan needs parliamentary approval to issue bonds, which will pay for almost half the budget this fiscal year. The premier said he won't resign unless the bill is passed, amid concern the opposition will use its control of the upper house to hold up the release of the funds.
"We are in an extreme situation where the government is spending in hopes that the bill will be passed," said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities. "Policy makers need to realize how important this bill is."
The government will run out of money in October or November, Noda said. Kan yesterday released his second extra budget, a 2 trillion yen (US$25 billion) rebuilding plan that was scaled back amid growing calls for him to step down. The government has said the total 6 trillion yen of outlays announced so far won't require bond sales.
Kan's efforts to pass the bill may be complicated by the resignation of his Reconstruction Minister Ryu Matsumoto, who stepped down yesterday, a week into his job after publicly scolding the governor of a tsunami-devastated area.
"If the bill is not passed in the current Diet session, the seamless management of the budget beyond September will be difficult," Noda said at a press conference in Tokyo yesterday. "We've got our backs against a wall and need to do our best to avoid that situation."
Prime Minister Naoto Kan needs parliamentary approval to issue bonds, which will pay for almost half the budget this fiscal year. The premier said he won't resign unless the bill is passed, amid concern the opposition will use its control of the upper house to hold up the release of the funds.
"We are in an extreme situation where the government is spending in hopes that the bill will be passed," said Tatsushi Shikano, a senior economist at Mitsubishi UFJ Morgan Stanley Securities. "Policy makers need to realize how important this bill is."
The government will run out of money in October or November, Noda said. Kan yesterday released his second extra budget, a 2 trillion yen (US$25 billion) rebuilding plan that was scaled back amid growing calls for him to step down. The government has said the total 6 trillion yen of outlays announced so far won't require bond sales.
Kan's efforts to pass the bill may be complicated by the resignation of his Reconstruction Minister Ryu Matsumoto, who stepped down yesterday, a week into his job after publicly scolding the governor of a tsunami-devastated area.
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