French PM arrives in Japan to discuss economy

15th July 2010, Comments 0 comments

French Prime Minister Francois Fillon arrived Thursday in Japan for a short visit aiming at persuading investors of the economic stability of the eurozone.

Fillon is expected to tell several hundred Japanese businessmen on Friday that austerity measures launched by European countries will help them avoid a meltdown of the type suffered by Greece.

Japan's central bank, the Bank of Japan (BoJ) warned Thursday of risks from Europe, where a fiscal crisis has threatened the global recovery.

The euro has plummeted against the yen recently, hitting Japanese exporters and eroding their competitiveness.

The French government is committed to reining in its public debt to eight percent of gross domestic product (GDP) this year, six percent in 2011 and three percent in 2013, through deep cuts similar to those being planned in Germany and the United Kingdom.

Fillon, accompanied by Finance Minister Christine Lagarde and Jean-Pierre Jouyet, president of the French Financial Markets Authority, will then meet new centre-left Japanese Prime Minister Naoto Kan.

Japan fell into a severe recession amid the global financial crisis but clawed out of it in early 2009.

The BoJ Thursday raised its growth forecast to 2.6 percent for this fiscal year.

Kan has warned of a Greece-style debt crisis and proposed doubling the five-percent consumption tax in order to fix tattered finances in Japan where public debt has spiralled to nearly 200 percent of GDP.

The talk of tax hikes cost his party dearly at elections last weekend at which the DPJ lost the upper house, but the International Monetary Fund (IMF) on Wednesday warned Japan that there was no way around the fiscal pain.

After leaving Japan Fillon then heads 7,000 km (4,400 miles) south to New Caledonia, for a three-day visit.

© 2010 AFP

0 Comments To This Article