The Japanese economy is in the middle of an unprecedented crisis. Although the fiscal reconstruction is still an unchangeable medium and long goal, the economic recovery is the current top priority. The expansion of fiscal spending — a large-scale and swift one is desperately needed now to ensure the economic growth and stabilize the employment situation.
The Japanese government is required to immediately draw up the 2009 supplementary budget and implement stimulus measures without a break. The following items should never be forgotten in the policy implementation:
Financial institutions are tightening credit to push up their capital ratios for survival amid the stock market slump. It is putting pressure on corporate borrowers. It is time to come up with a Copernican revolution since the market shows no sign of passing through the difficulty. The introduction of ETF convertible bonds guaranteed by the government can play part of the role. Keidanren will continue to pursue possibilities to improve the situation, working on law makers to join the policy discussion without hesitation.
As the recession worse, the necessity of job security and domestic industry protection has led increasing number of countries to take actions that can be interpreted as protectionism since the end of last year.
Keidanren is determined to work harder to maintain the free trade system and avoid further deterioration of the world economy with the unfavorable trend. This is our message to the G20 summit leaders having a meeting on April 2.