Japan Finance Minister to Step Down After G7 Furore

Topics:Economy (Global) | G7 | Politics & Government | Japan
By: Reuters | 16 Feb 2009 | 08:55 PM ET
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Japanese
Finance Minister Shoichi Nakagawa said on Tuesday he would resign,
following criticism of his behavior at a weekend G7 news conference in
Rome. Nakagawa, who denied being drunk at the news conference, said he
intended to resign after the government's budget is passed by the lower
house of parliament.

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Prime
Minister Taro Aso had asked his close ally Shoichi Nakagawa to stay in
his post on Monday, but emboldened opposition parties were set to grill
the minister again in parliament and have said they would submit a
censure motion to the upper house if his answers fail to satisfy.
"It
was a sloppy performance that damaged our country's interests. Prime
Minister Taro Aso can not neglect this situation that symbolizes the
slackness in his administration," the Mainichi newspaper said in an
editorial on Tuesday.
"The
(opposition) Democratic Party is considering a censure motion against
Nakagawa, but the prime minister himself must show responsibility for
the weakening morals in his administration. "It would be irresponsible
to pretend not to notice after having caused trouble to the public."
The
fuss over Nakagawa's behavior at the news conference comes as Aso's
public support is plummeting -- below 10 percent in one survey
published on Sunday -- ahead of an election that must be held no later
than October and as the economy sinks deeper into recession.
Surveys
show the main opposition Democratic Party of Japan has a good shot at
ousting Aso's Liberal Democrats, ending more than 50 years of almost
unbroken rule.
Nakagawa,
55, repeated on Tuesday that he had not done more than sip some wine
before the news conference at the end of the Group of Seven meeting of
finance leaders in Rome on Saturday.

He has blamed cold medicine for affecting his
behavior, and said he would submit a note from his doctor about the
drugs he took on the trip.
"It's true that there was wine in front of me. I sipped but it's not like I drank," Nakagawa told reporters.
Nippon Television reported that he had gone to the hospital for checks ahead of an expected appearance in parliament.
Nakagawa's
resignation will be a heavy blow to Aso, struggling to keep his own
grip on power after a series of gaffes and policy flip-flops. The
departure, however, was unlikely to have much effect on economic
policies.
Health
and Labour Minister Yoichi Masuzoe told reporters that it would be
ill-advised to replace Nakagawa, who is in charge of the budget as well
as banking supervision, at the present time.
"It
would be a minus to change the minister in charge of the budget at at
time when the budget is being debated in parliament," Kyodo news agency
quoted him as saying.
Aso
is trying to enact an extra budget for the fiscal year ending on March
31 as well as a record 88.5 trillion yen ($965 billion) budget for the
year to March 2010 to help stimulate the economy, now sinking deeper
into recession.
There
have been calls for additional stimulus after data released on Monday
showed the world's second biggest economy in its sharpest quarterly
decline since the 1974 oil crisis.

Global downturn has slashed demand for Japan's cars, tech and other exports and economists warn of more pain ahead.
Consumer Affairs Minister Seiko Noda, however, had harsh words for her colleague.
"It
was a shocking video," she said of the video of the Group of Seven news
conference in Rome, where Nakagawa slurred his words and appeared to
fall asleep at one point. "Whether he quits or not is up to the
minister or to the prime minister, who appointed him," Kyodo quoted
Noda as telling reporters.
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