Clash with Ozawa said behind resignation

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Finance Minister Hirohisa Fujii’s resignation Wednesday is a cause of serious concern for Prime Minister Yukio Hatoyama’s Cabinet, experts said, noting discord with ruling party kingpin Ichiro Ozawa may have influenced the veteran lawmaker’s decision to exit.

“In reality, this is about Democratic Party of Japan Secretary General (Ichiro) Ozawa,” said Masaru Takagi, a professor at Meiji University in Tokyo, pointing out that Fujii and Ozawa — regarded as the most powerful man in the ruling coalition — had been on bad terms recently.

Takagi said that rather than health concerns, the discord between Fujii and the Cabinet’s so-called shadow shogun was the main factor that prompted Fujii to resign.

Fujii, who was admitted to hospital last week for exhaustion, told Hatoyama on Tuesday that he may not be able to handle his tasks during the ordinary Diet session, which begins later this month.

Although Hatoyama had initially said a decision would not be made until Fujii’s health check results were in, he found it hard to retain the 77-year-old veteran whose health concerns made headlines.

Fujii’s exit comes just days after Hatoyama said passing the fiscal 2010 budget and averting a double-dip recession are the government’s priorities heading into 2010.

Ozawa and Fujii had shared close ties earlier in their careers, but their falling out became evident when Fujii openly criticized Ozawa over his political funds scandal that broke in 2009, urging Ozawa to step down as DPJ president.

Ozawa, often referred to as the puppet master of the Cabinet, retaliated by reportedly showing hesitation at having Fujii named finance minister.

“Fujii called on Ozawa to resign as DPJ chief and their relationship has been complicated ever since,” Takagi said.

When campaigning for the August general election, the DPJ promised to end surcharges on road-related taxes that amount to about ¥2.5 trillion in revenue every year. But Ozawa pressed Hatoyama to backpedal on this pledge.

Although Fujii called the political pledge “an extremely large theme of the (campaign platform) manifesto,” Hatoyama heeded Ozawa and announced in December that the surcharges would remain.

As reporters watched, Ozawa openly criticized the budget draft compiled under Fujii’s initiative last month.

“It’s obvious to anyone’s eyes that this has more to do with Fujii’s relationship with Ozawa than his health,” Keio University professor Yoshiaki Kobayashi explained.

The Cabinet is seeking to pass the second supplementary budget this month and quickly move on to engaging in the 2010 fiscal budget hearings in hopes of passing that bill by the end of March.

Hatoyama wanted Fujii to stay on, telling reporters earlier Wednesday the veteran designed the nuts and bolts of the 2010 fiscal budget plan.

Fujii had been expected to play a key role in answering questions over the budget once the Diet opens.

“He gave birth to the budget plan, and I strongly hope he will develop it,” Hatoyama said.

But Fujii’s resolve to quit was unshakable, prompting Hatoyama to start unofficially looking for a successor.

Hatoyama appointed Deputy Prime Minister Naoto Kan to take over Fujii’s post.

Before Kan’s appointment was announced, analysts and government officials were equally uncertain of who would be the best fit for the position.

Earlier Wednesday, Chief Cabinet Secretary Hirofumi Hirano dodged the successor issue and only acknowledged that the issue should not affect the finance market regardless of the outcome.

Meiji University’s Takagi said, “Kan is of course talented, but he’s the deputy prime minister as well as the state minister in charge of national strategy. For him to handle the position of finance minister is impossible.”

With Kan’s appointment, Yoshito Sengoku, state minister in charge of administrative reform, will concurrently serve as state minister for national strategy, a post Kan holds at present.

Before Kan was named, Senior Vice Finance Minister Yoshihiko Noda was also seen as a good candidate, since he was deeply involved in designing the fiscal 2010 budget plan.

But Takagi said Noda’s cool relations with Ozawa could force him to face similar difficulties as Fujii if he had assumed the position.

Keio’s Kobayashi said juggling the job of finance minister while being on good terms with the party was something only veterans could handle.