Japan should learn from the turmoil over Greek debt crisis
(From The Japan Times April 29 issue)

日本はギリシャ財政危機に学べ

The joint communique issued April 23 in Washington by the finance ministers and central bankers of the Group of 20 advanced and emerging economies stated that unemployment remains high in many countries, despite the global economy having "progressed better than previously anticipated." It also noted that the recovery "is proceeding at different speeds within and across the regions."

The G-20 financial chiefs were realistic enough to agree that different economic conditions prevail from country to country, and that some countries need to continue stimulus measures "until the recovery is firmly driven by the private sector and becomes more entrenched." They also agreed that "some countries are already exiting" from recession, and said that "we should all elaborate credible exit strategies from extraordinary macroeconomic and financial measures... while taking into account any spillovers."

Importantly, they stressed the need to restore financial health to public finances, which have deteriorated due to massive stimulus measures adopted to combat the global economic downturn. This message is important not only for advanced economies but also for emerging economies whose weight in the global economy has increased.

The shadow of the Greek debt crisis hung over the meeting. Mr. Dominique Strauss Kahn, chief of the International Monetary Fund, briefed the G-20 meeting participants on the subject, but the communique did not mention it. Athens asked the IMF and the European Union for a bailout package the day before the communique's release.

Japan, whose aggregate public debt amounted to 218 percent of gross domestic product at the end of 2009, must take a cue from the Greek crisis. At present, most Japanese bonds are bought by domestic investors. But as the graying of the population progresses, Japan's savings rate is declining. Once speculative money destabilizes the market and interest rates go up, the burden of paying interest on bonds will be enormous. Japan needs to tackle the difficult task of forming a convincing strategy for fighting deflation and carrying out financial reconstruction.

G20の財務相･中央銀行総裁会議は共同宣言で、世界経済の回復は予想以上に進んでいるが、その速度にはばらつきがあり、多くの国で失業率は高止まりしていると述べた。刺激策のつけで悪化した財政の健全化の必要性も強調された。世界経済における重みが増した新興国に対しても重要なメッセージだ。

ギリシャはIMFとEUに融資を仰いでいるが、同国の問題は声明には明記されなかった。ギリシャ危機は日本にとって教訓となる。日本の国債は大半が国内で保有されているが、高齢化の影響で貯蓄率が減少、投機マネーが市場を不安定にさせ利率が上がれば公債利子を支払う負担は膨大になる。政府にはデフレ脱却と財政再建に向けた説得力ある戦略を求めたい。