• Kyodo

  • SHARE

The three leading political parties agreed Wednesday on the need to help people and small to midsize businesses damaged by the March 11 catastrophe cope with their debts but could not decide on specific measures, lawmakers involved said.

Among the agreements reached by the ruling Democratic Party of Japan, the conservative Liberal Democratic Party and New Komeito are: 1) To subsidize interest on loans forgiven by financial institutions. 2) To create a system through which a public institution can provide payment guarantees for leasing companies that lend machinery and other equipment to businesses damaged by the quake or the tsunami. 3) To draw up guidelines for facilitating out-of-court settlement of loan waivers between lenders and individual debtors.

The three parties, however, failed to iron out their differences over specific measures.

For example, the DPJ adhered to its plan to establish a new fund to purchase troubled loans from smaller businesses, while the LDP and New Komeito opposed the scheme on the grounds that such a fund will not be suitable for corporate turnarounds because it needs to quickly recover invested capital.

The two opposition parties instead proposed that a public institution buy loans that would be held for long periods to help troubled companies recover.

They also opposed the DPJ’s plan to exclude farmers and fishery operators from the loan-purchasing program and called for treating them the same as smaller businesses. The DPJ, for its part, argued against the LDP’s proposal to require financial institutions to forgive loans to individuals who have liabilities in excess of assets but are willing to rebuild their homes.

The three parties began coordinating their plans Wednesday to address the “double loan” problem involving individuals and businesses in need of fresh loans to repair their homes and facilities but already have existing debts. They agreed to hold another meeting Friday.

The DPJ-led government plans to include a tripartite agreement on the loan issue in the second supplementary budget for fiscal 2011 to promote postdisaster reconstruction.

Some tax changes OK’d

The Lower House on Thursday approved a bill to cover part of the tax changes proposed for fiscal 2011, including easing levies on small and medium-size firms to boost the economy. The bill is now subject to deliberations in the Upper House and is expected to be passed by month’s end.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW