Japan wants ‘progress’ on Europe debt at G20 talks

April 3, 2012


Japanese Minister of Finance, Jun Azumi/AFP
TOKYO, Apr 3 – Japan’s finance minister said Tuesday he hoped to see “progress” on beefing up IMF funding for the crisis-hit eurozone at talks later this month, but held off saying how much Tokyo may chip in.

Jun Azumi also said he thought Europe’s debilitating debt crisis was “calming down”, in comments that follow his welcoming of a weekend agreement by the region’s finance chiefs to bolster a firewall against future debt crises.

The deal in Copenhagen on Friday has thrown the ball back in the court of economic powerhouses, including Japan, who had pledged more cash for the International Monetary Fund only if Europe stumped up first.

Speaking on Tuesday at a regular news conference Azumi said: “I think it is better for markets and the global economy to see some sort of progress in Washington on April 20 when all people get together (at the G20 finance ministers’ meeting).

But he said Japan had not yet made a decision on its own contribution, adding: “We would like to consult with other nations such as the (United States) before deciding on the details of contributions.”

“It’s necessary for us to deal with the issue carefully as our stance would have a big impact on others,” he said, according to Dow Jones Newswires.

He also said that “considering the current situation in Europe, it is true that (the crisis) has been calming down”, according to the online edition of the Nikkei business daily.

“The measures taken by the European Central Bank (ECB) late last year have been very effective,” he was quoted as saying.

European leaders hope Friday’s move to boost its rescue fund to $800 billion from $500 billion would encourage other nations to dig into their pockets.

After providing loans to help debt-wracked countries such as Greece, IMF chief Christine Lagarde has asked members to give the fund $500 billion extra for possible future bailouts.

The issue is expected to be top of the agenda at a meeting of finance ministers from the Group of 20 on April 20.

The ECB has chopped eurozone borrowing costs to an all-time low of 1.0 percent and embarked on a hotly contested programme of buying up the bonds of debt-mired countries.

Most recently, in two so-called long-term refinancing operations in December and February, it pumped more than 1.0 trillion euros ($1.3 trillion) into the banking system in a bid to avert a credit squeeze in the 17 countries that share the euro.

However, Azumi said “there are some areas of concern” over Spain, which is racing to slash its deficit to reassure markets that it will not follow Greece, Ireland and Portugal in requesting an international bailout.

Most analysts say Spain will need austerity measures worth around 50 billion euros if it is to meet its deficit target for this year.

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