French President Francois Hollande said Friday Japan's big spending and ultra-loose monetary policies aimed at boosting its flagging economy were "good news" for austerity-weary Europe. On a visit to Tokyo, the Socialist leader also stressed his concern at regional tensions as Japan and China square off over disputed islands - but slipped up verbally by confusing his hosts for the Chinese.
Amid a growing backlash in France over the German-led austerity drive for debt-laden Europe, Hollande called for the same "priority on growth" being stridently promoted by Japanese Prime Minister Shinzo Abe. "The Japanese government has taken a number of measures since Mr Abe's team came to power," he told reporters. "It is not for me to judge them; they are a matter for Japan.
"But the priority given to growth and the fight against deflation, along with the emphasis on competitiveness for business... is good news for Europe, because in Europe we also have to give priority to growth." Abe was swept to power in December on a pledge to turn around years of economic weakness and growth-sapping deflation. He launched a huge fiscal stimulus programme and press-ganged the central bank into flooding the markets with money as it ramped up an already weighty bond-buying programme. The plan was to double the amount of cash in circulation, forcing up prices and pressuring investors to put their money in riskier assets.
The yen has plunged, driving the Tokyo stock market to five-year highs as investors eye swelling profit margins for Japan's exporters. Even if the Nikkei has suffered some steep declines in recent trading, the relative success of Japan's daring experiment and the rocketing approval ratings it has brought to Abe are a far cry from the growing discontent of France.
Since his election a year ago, Hollande has vowed to tips the main focus of Europe's economic recovery efforts towards growth rather than belt-tightening, but faces opposition from German Chancellor Angela Merkel, who insists the continent must first get its fiscal house in order. Hollande's praise for Abe's reforms came as Japan and France agreed to work on the joint development of military hardware, as tension simmers in East Asia amid historic shifts that have seen China supplant Japan as the world's second-biggest economy.
Tokyo is locked in a corrosive squabble with Beijing over the ownership of a small group of uninhabited islands in the East China Sea. Earlier this year, Japan voiced unease at the sale by a French firm of helicopter-landing equipment to China, saying it might be used by Beijing to strengthen its presence around the Senkaku/Diaoyu islands. During an address to Japan's parliament, Hollande told lawmakers that he was conscious of the security situation in East Asia. "I cannot ignore the tensions in the region and I am concerned about them," he said "I hope they can be resolved by dialogue and that countries can settle their differences in accordance with international law."
However, Hollande risked undermining his positive press coverage in Japan with a slip of the tongue at an earlier news conference. Speaking in French, he referred to the Algerian hostage crisis in January during which 10 Japanese nationals died, saying he had "expressed the condolences of the French people to the Chinese people". The president made no attempt to correct his mistake and while his female interpreter changed the word to "Japanese" in her simultaneous translation, French speakers in the room picked up on the error. Polls in both Japan and China show distrust of the other nation is rampant - and neither side's nationals like to be confused with the other. The main focus of Hollande's three-day trip is on trade, especially in the nuclear arena.
The visit saw the signing of agreements in the atomic sector, with France's AREVA and Japan Nuclear Fuel expanding collaboration on used-fuel processing at Japan's Rokkasho-mura. Abe has said he will order the re-start of more of Japan's idled nuclear reactors once their safety is assured, despite public unease in the aftermath of the 2011 Fukushima disaster.
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