» 09/18/2009 11:55 JAPAN The new government in Tokyo cuts trillions in business loans Funding already decided will be reduced, perhaps by 15 thousand to "only" 7 thousand billion yen. Experts say Tokyo wants to collect resources for other projects, but is likely to depress an economy in difficult recovery.
Tokyo (AsiaNews / Agencies) - The newly elected government, led by the Democratic Party decided today to suspend some of 15 thousand billion yen (more than 112 billion) in aid decided by the previous government. Finance Minister Hirohisa Fuji has indicated that over 7 thousand billion will be paid out, although the new program is still being studied and is expected to be defined by 2 October.
The announcement has raised concerns among many experts who fear that a sudden reduction in funding will have recessive effect on the economy, with many companies still struggling who have set their future business plans on this financial support. Fuji has repeated that the state budget deficit will be reduced by eliminating waste and without affecting economic growth. But analysts point out that the new government needs to raise the funds to maintain the reforms promised during the election, such as the reduction of taxes on vehicle fuel for fiscal year 2010, a move which is estimated to mean savings for drivers of 2,500 billion yen and revenue shortfalls for 1.700 billion for the state and 800 billion for local authorities.
Meanwhile, the government of Prime Minister Yukio Hatoyama, installed two days ago, is enjoying great voter trust; according to a survey carried out by the Nikkei newspaper and TV Tokyo Corp. it appears to have 75% approval rating: second only to the 80% that the first government of Prime Minister Junichiro Koizumi enjoyed in April 2001. Polls by other known newspapers all showed consensus over 71%. Respondents say they are very confident that the policy of the new government (the first of the DPJ for over 15 years) could bring great economic improvements.
