Tags: Japan | Greece | bailout | Azumi

Japan May Share Burden of Greek Bailout

Tuesday, 27 Sep 2011 11:12 AM

Japanese Finance Minister Jun Azumi said on Tuesday he would not rule out Japan sharing some of the burden related to a bailout scheme for Greece, provided that Europe mapped out a rational plan that could ease market jitters.

Speaking days after meetings of the International Monetary Fund and G20 that were dominated by discussion of Europe's sovereign debt problems, Azumi urged each country to make efforts to implement what was agreed at a European summit on July 21.

"Each country should respond to the rescue plan by winning approval from their parliaments, and if they need a larger framework, I would consult with (U.S. Treasury Secretary Timothy) Geithner," Azumi told reporters after a cabinet meeting.

"If there is a scheme that's based on a firm process, involves a reasonable amount of money and could provide the world and markets with a sense of security regarding a Greek bailout, I would not rule out the possibility of Japan sharing some of the burden."

Azumi's comments come a week after Prime Minister Yoshihiko Noda was cited in a media report as saying Tokyo is open to buying more bonds issued by a European bailout fund to alleviate concerns over the sovereign debt crisis in Europe.

The euro climbed out of negative territory late on Monday and continued its gains early on Tuesday, after a media report that European officials are working on a detailed plan aimed at shoring up European bank stability.

The plan reportedly involves issuing bonds and using the proceeds to purchase debt of distressed European states, though it said it may not be the only plan under discussion, CNBC reported.

The news raised investor expectations for a resolution to the euro-zone debt crisis, though investors remain on alert for signs of a Greek debt default.

European officials are now focused on ways to beef up their existing 440 billion euro ($593 billion) rescue fund, yet investors are skeptical.

Finland and Germany will vote on the rescue fund this week, and passage of proposed changes should bode well for the euro.

Azumi also said he expects Japan's third budget for the current fiscal year, which is to help fund reconstruction from the March 11 earthquake and tsunami, to exceed 11 trillion yen ($144 billion).

Japan's government also said on Tuesday it wants to bring forward steps to ease the pain some companies feel from a stronger yen and enact the measures before it completes the extra budget.

© 2015 Thomson/Reuters. All rights reserved.

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