Japan stumps up more cash, Belgian govt falls
Written on December 21, 2008
Japan approved on Saturday an extra 4.79 trillion yen ($54 billion) budget to confront a financial crisis that has toppled banks, wrecked world growth and now played a part in the demise of Belgium’s government.
Tokyo has joined governments worldwide in pledging hundreds of billions of dollars of fiscal stimulus to lessen the impact of the crisis on their economies, many of which, Japan’s included, are already in recession.
The extra budget will help finance spending plans totaling 10 trillion yen in two packages Prime Minister Taro Aso has announced, one worth 27 trillion yen unveiled in October and another for 43 trillion yen set out on Friday.
Belgium’s King Albert consulted political leaders after the government collapsed following its botched attempt to bail out financial group Fortis.
Prime Minister Yves Leterme tendered his government’s resignation on Friday after a report by the Supreme Court found signs of political meddling to sway a court ruling on the future of the bank, a victim of the credit crunch.
The king, who under the constitution must decide whether to accept the resignation, held successive talks with the heads of the five ruling-coalition parties until 2 a.m. on Saturday.
Consultations were to continue later in the day. Belgian media said there was little chance of Leterme staying in power.
Leterme denied accusations he had sought to influence an appeal court which last week upheld a challenge by shareholders to a state-led carve-up of the bank, but acknowledged that the Supreme Court’s findings made his position untenable companies making payday loans.
The global economy’s lifeblood — credit — remains severely constrained despite authorities spending trillions of dollars to keep money markets functioning, propping up banks and producing economic stimulus packages.
The boss of Britain’s Barclays bank said people and firms would find it tough to get credit for up to two years yet.
“I think that we will see the process of reduced borrowing play out over at least the course of the next 12 months maybe, maybe 24 months,” John Varley told BBC Television’s Panorama programme.
China expanded its pledge to help neighbors ride out the crisis, saying it was willing to meet requests for assistance from Taiwan.
Ties between China and Taiwan, separated since the end of the Chinese civil war in 1949, have been warming since Taiwanese president Ma Ying-jeou took office in May.
“If … Taiwan asks for measures to ease its economic difficulties, the mainland is willing to do its utmost to provide aid,” said Jia Qinglin, the fourth most senior leader of China’s ruling Communist Party.
The financial crisis, sparked by a 2007 U.S. housing market meltdown and huge bank losses that ensued, has pushed much of the world into recession and even curbed China’s fast growth.
Filed in: term.