Azumi: Not Immune To Europe-Style Fiscal Crisis

And, unfortunately, they are acting accordingly, ensuring another lost decade and further destruction of their culture.

Azumi: Not Immune To Europe-Style Fiscal Crisis

By Kelly Olsen

Jan 18 (Dow Jones) — Finance Minister Jun Azumi said Wednesday that Japan is not immune to a euro-zone style fiscal crisis and that the government is “resolved” to raise the consumption tax to improve the nation’s finances.

Japan is “no exception,” Azumi said during a speech at the Foreign Correspondents’ Club of Japan, referring to the crisis in Europe in light of Japan’s own high debt levels.

Azumi said that although yields on Japanese government bonds are currently low, rates can quickly rise to “cause problems.”

“We cannot avert our eyes” from the problem of Japan’s outstanding debt, he said, which at around 200% of gross domestic product is the highest in the industrialized world.

Azumi said the government is resolved to raise the consumption tax rate to help bring the country’s finances under control, but acknowledged the difficulties in getting the legislation passed, saying it is “like climbing Mt. Everest.”

Prime Minister Yoshihiko Noda aims to submit legislation to double the tax to 10% by 2015 to a parliamentary session set to begin next week, though the unpopular move is opposed by opposition parties and has sparked defections from Noda’s ruling Democratic Party of Japan.

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