JAPANESE MORNING PRESS HIGHLIGHTS 11//08

UNCLAS SECTION 01 OF 11 TOKYO 003065 SIPDIS DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; SECDEF FOR JCS-J-5/JAPAN, DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 Index: 1) Aso Cabinet's non-support rate, at 41.9 PERCENT , now greater than support rate of 40.5 PERCENT in latest Yomiuri poll (Yomiuri) Politics and defense: 2) ASDF top brass Tamogami fired for writing published essay justifying Japan's wartime aggression, glorifying former Imperial Japanese Army (Mainichi) 3) Tamogami's essay opposing government's official positions on past wartime acts raises question of civilian control (Mainichi) 4) Ex-ASDF chief's essay drawing fire even from SDF members (Yomiuri) 5) Democratic Party of Japan to call for former ASDF chief to appear as witness before the Diet (Yomiuri) 6) Tamogami incident likely to adversely affect the passage of the bill extending the MSDF's refueling mission in the Indian Ocean (Mainichi) 7) Former ASDF chief Tamogami retires from the Self-Defense Forces two years earlier than ordinarily scheduled (Yomiuri) 8) Until the end, Tamogami was unapologetic, showed no regret for his controversial historical essay (Yomiuri) 9) Another blow to Aso government ahead of trilateral summit (Mainichi) 10) Democratic Party of Japan (DPJ) to call on Japan to designate on its own North Korea as a "terrorist state" (Sankei) 11) Prime Minister Aso has tightly packed diplomatic schedule (Nikkei) 12) Japanese government intent on establishing contacts with the camp of Obama, assuming that he will win the U.S. president race (Mainichi) 13) Prime Minister Aso to express intention to hold a second financial summit hosted this time by Japan (Tokyo Shimbun) 14) State Minister for Economic and Fiscal Policy Yosano expects step-by-step increase of consumption tax to 10 PERCENT around 2010 if economy recovers (Mainichi) Election: 15) LDP's Hidenao Nakagawa blasts Prime Minister Aso for delaying the dissolution of the Diet and a snap election (Asahi) 16) DPJ head Ozawa expects Diet dissolution after fall (Asahi) Articles: 1) Poll: Cabinet support rate sags to 40.5 PERCENT YOMIURI (Page 1) (Full) November 4, 2008 The rate of public support for Prime Minister Aso's cabinet dropped 5.4 percentage points from last month to 40.5 PERCENT , the Yomiuri Shimbun found from its telephone-based nationwide public opinion survey conducted Nov. 1-3. The nonsupport rate rose 3.3 points to 41.9 PERCENT . The Aso cabinet's nonsupport rate topped its support rate about a month after its inauguration. TOKYO 00003065 002 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 Aso has indicated he would not dissolve the House of Representatives and forgo a general election for the time being in order to fast-track measures to deal with the impact on Japan's economy of the current financial crisis from the United States. In the survey, respondents were asked if they appreciated this. In response to this question, 56 PERCENT answered "yes," with 33 PERCENT saying "no." However, when asked about the Aso cabinet's response to the financial crisis, affirmative answers accounted for no more than 42 PERCENT , with negative answers at 46 PERCENT . Aso has also announced an additional package of economic stimulus measures, including a plan to pay across-the-board flat benefits adding up to 2 trillion yen. Asked about this flat-rate payment, "yes" came from only 38 PERCENT , with "no" at 56 PERCENT . Meanwhile, 56 PERCENT appreciated a plan to lower expressway tolls, with 37 PERCENT negative. Aso has further indicated that he would raise the consumption tax in three years, making it a precondition to carry out administrative reform and turn the nation's economy around. Asked about this, "yes" came from 42 PERCENT and "no" from 51 PERCENT . In the breakdown of public support for political parties, the ruling Liberal Democratic Party stood at 32.4 PERCENT , down 6.3 points from last month. The leading opposition Democratic Party of Japan (Minshuto) was at 23.4 PERCENT , down 0.9 points from last month. In the public's proportional representation choice of a political party in the next election for the House of Representatives, the LDP scored 32 PERCENT , with the DPJ at 31 PERCENT . The LDP sustained a substantial drop of 7 points, and the DPJ down 1 point. 2) Government dismisses ASDF chief of staff over essay denying government view of Japan waging war of aggression MAINICHI (Top Play) (Excerpts) November 1, 2008 It was learned yesterday that Gen. Toshio Tamogami, the Air Self-Defense Force (ASDF) chief of staff, had written an essay in which he stated: "It is certainly a false accusation to say that our country was an aggressor nation." This view deviates from the successive governments' position on Japan's wartime history, as represented by a 1995 statement by then Prime Minister Tomichi Murayama apologizing for Japan having inflicted damage on Asian and other countries through its colonial rule and aggression. The government has interpreted that the Constitution of Japan bans the use of the right to collective self-defense. The essay also criticizes this interpretation as mind-controlled by the judgments in the Tokyo Trial. In reaction, the government dismissed Tamogami last night. In a contest of essays, the essay Tamogami had submitted won a first prize. The original essay and its English translation were posted on the Internet yesterday. In a press conference held at the Defense Ministry last night, Defense Minister Yasukazu Hamada stated: "He publicized his view significantly different from the government's current position on Japan's wartime history. It is not appropriate for an ASDF chief of staff to do so." ASDF Deputy Chief of Staff Shigeru Iwasaki will serve as acting chief of staff. TOKYO 00003065 003 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 In reference to the Sino-Japanese War, he notes in the essay: "Our nation, which was drawn into the war by Chiang Kai-shek, was a victim." He then justifies Japan's colonial rule, saying that people in Manchuria and on the Korean Peninsula were "released from tyrannical rule owing to the efforts made by the Japanese government and Imperial Army. Their living standard was remarkably improved." He concludes: "Many Asian countries have positively evaluated the Greater East Asia War. It is certainly a false accusation to say that our country was an aggressor nation." Citing the restrictions placed under the government's interpretation of the Constitution on the use of the right to collective self-defense, as well as the use of weapons, Tamogami notes: "Self-Defense Force troops have been hedged round with restrictions. As long as they are released from the mind-control, our nation will never be able to establish a system to protect itself on its own." 3) Commentary: Civilian control called into question MAINICHI (Page 2) (Full) November 1, 2008 Air Self-Defense Force Chief of Staff Toshio Tamogami, the ASDF's top leader, has been sacked for his recent writing of an essay that conflicts with the government's view. This could undermine civilian control of the Self-Defense Forces. Meanwhile, the Diet has been divided, with the ruling parties holding a majority in its lower chamber and the opposition parties dominating its upper chamber. Such a parliamentary situation has stagnated decision making. If this has caused civilian control to deteriorate, the situation is serious. The whole nation should seriously review relations between politics and the SDF. "If they sound as if to say politics is doing nothing, that's the same as the February 26 incident, which was a coup pulled off by a group of officers in the now-defunct Imperial Japanese Army." With this, Agriculture Minister Shigeru Ishiba, who was previously defense minister, voiced concern in the wake of Tamogami's sacking about SDF officers unapologetically asserting their own standpoints over matters that successive cabinets have handled carefully. In the 21st century, however, the SDF is at a major turning point, changing from an entity that exists only for deterrence to an entity that actually functions. Some say the ASDF's top officer went out of control because political governance has failed to catch up with change. Tamogami has aroused criticism resulting from his outspoken words. Satoshi Morimoto, formerly with the ASDF and currently teaching at Takushoku University, says: "One who is straightforward from his younger days is much appreciated within the organization, and that person climbed the ladder to the ASDF chief of staff post. That is probably because his opinion was taken as correct." So saying, Morimoto indicated that the essay was intended to speak for the ASDF. Indeed, the greater part of the SDF's uniformed officers have been calling for "discussions in the political arena" over what is incorporated in the essay, which focused in particular on collective self-defense, which is prohibited according to the government's TOKYO 00003065 004 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 current constitutional interpretation, and guidelines for the use of weapons or the so-called rules of engagement (ROE). The SDF has been on overseas missions continuously in the Indian Ocean and Iraq. Meanwhile, it is also true that SDF officers on overseas missions have faced ambiguities about the government's constitutional interpretation, and they are strongly calling for changing the government's constitutional interpretation. Politics, in order for it to display governance, should keep an eye on the SDF, of course, and should sincerely face security debate. Otherwise, the SDF brass will likely continue to raise questions about politics. 4) Ex-ASDF chief's essay drawing fire even from SDF members YOMIURI (Page 38) (Excerpts) November 1, 2008 Gen. Toshio Tamogami, the Air Self-Defense Force chief of staff, was dismissed yesterday over his essay that included inappropriate views on Japan's wartime history and future options for the Self-Defense Force (SDF). Tamogami was known for speaking frankly. Even SDF members have voiced criticism of the contents of the essay for significantly deviating from the views of successive Japanese governments and the SDF's principle of civilian control. Defense Minister Nakasone, who decided to dismiss Tamogami, gave a press conference at the Defense Ministry starting at 10:00 and said, looking grim: "I think he expressed his own view, but I wanted him to take his position into consideration." Tamogami is known for his cheerfulness and unique words and deeds. He was popular among his subordinates, as one commented: "He brightened the atmosphere in the ASDF Staff Office." In executive meetings, he offered his candid views, favorably received even by uniformed personnel. But his remarks sometimes gave rise to controversy. The essay includes such sensational expressions as: "Japan, which fought the Greater East Asia War, won a high reputation"; and "Compared with other countries' troops, SDF troops have been bound firmly hand and foot." On this essay, one SDF member commented: "They are what (he) has said from before"; and another said: "That's how he is." An ASDF unit chief appeared shocked by the dismissal of Tamogami, remarking: "He always spoke for SDF members without currying favor with those around him." But another senior SDF member lamented: "China and South Korea will unavoidably react fiercely. When considering his position, I cannot understand what he did." 5) DPJ to take offensive in dealing with ex-ASDF chief problem by demanding his Diet testimony as unsworn testimony YOMIURI (Page 4) (Abridged slightly) November 2, 2008 The Democratic Party of Japan (DPJ),the largest opposition party, on Nov. 1 strengthened its criticism of the government over its dismissal of Air Self-Defense Force (ASDF) Chief of Staff Toshio Tamogami over a controversial essay denying Japan waged a war of aggression against other Asian countries before and during World War, which is against the government's position. There is a view that the issue will unavoidably have an impact on deliberations in TOKYO 00003065 005 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 the House of Councillors on a bill amending the new Antiterrorism Special Measures Law, although the government has aimed at an early enactment of the legislation. In an outdoor speech the same day in Inzai City, Chiba Prefecture, DPJ Secretary General Yukio Hatoyama stressed: "If Prime Minister Taro Aso thinks that the issue has resolved with the dismissal, it would be a big mistake. We will strongly pursue it in the Upper House." Referring also to the fact that Tamogami stated he was not concerned about the Nagoya District Court's ruling in April that part of the ASDF's activities in Iraq was unconstitutional, Hatoyama criticized the then government's response, saying: "(The government) should have taken (the situation) more seriously." Azuma Koshiishi, chairman of the DPJ caucus in the Upper House, also underscored in a street corner speech in Fuji-Kawaguchiko Town, Yamanashi Prefecture, on Nov. 1: "We would like to pursue the responsibility of the prime minister." The DPJ intends to pursue such points as Tamogami's personal view of history, the Defense Ministry and the Self-Defense Forces (SDF),and Tamogami's failure in reporting (to the government) on the release of his essay in view of civilian control. The Upper House Foreign Affairs and Security Committee, which is now deliberating on the new antiterrorism bill, plans to summon persons related to the Afghan situation to testify as unsworn witnesses. Although the ruling coalition aims to take a vote on the bill on Nov. 6, the DPJ intends to seek Tamogami's testimony as an unsworn witness. Keiichiro Asao, defense minister of the shadow cabinet of the DPJ, said: "It is necessary for our party to show how it deals with the matter in order to prevent a recurrence." He indicated in his remark that the DPJ would not respond to a vote-taking unless the government present preventive measures. 6) DPJ demand for intensive deliberations on dismissal of ASDF chief over controversial essay likely affect deliberations on refueling bill MAINICHI (Page 2) (Full) November 2, 2008 Gen. Toshio Tamogami was dismissed yesterday as Air Self-Defense Force (ASDF) chief of staff over his essay contradictory to the government's current position on Japan's wartime history. In reaction to the controversial essay, the Democratic Party of Japan (DPJ) has launched an offensive, with Secretary General Yukio Hatoyama claiming: "It is impermissible for the top ASDF chief to release a statement denying Japan's responsibility for the war." The main opposition party is poised to call in a meeting of the House of Councillors' Foreign Affairs and Defense Committee for intensive deliberations to ask about Prime Minister Taro Aso's historical views and pursue Defense Minister Yasukazu Hamada's supervisory responsibility. With this development, uncertainty is looming larger over the fate of a bill amending the New Antiterrorism Special Measures Law to extend the Maritime Self-Defense Force's refueling mission in the Indian Ocean. In a street-corner speech in Inzai City, Chiba Prefecture, yesterday, Hatoyama emphasized: "(The essay) makes Asian countries worried about Japan's future actions." Regarding the Nagoya High Court's ruling that the Air Self-Defense Force's airlift operation TOKYO 00003065 006 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 in Iraq was unconstitutional, Tamogami had said: "I don't care." Also taking up this controversial remark, Hatoyama commented: "The government should have taken it more seriously." In an interview with the Mainichi Shimbun, Azuma Koshiishi, chairman of the DPJ's caucus in the Upper House, said: "The problem will not end just with his dismissal." Party executives in their meeting on Nov. 4 are expected to discuss how to deal with this issue. 7) Defense Ministry announces former ASDF Chief of Staff Tamogami's mandatory retirement in rare move YOMIURI (Page 4) (Full) November 4, 2008 The Defense Ministry said on Nov. 3 that Toshio Tamogami, who had been dismissed as Air Self-Defense Force chief of staff over a controversial essay on World War II and other events, retired from the ministry as of Nov. 3. The ministry made the rare move in the judgment that a slow decision might have a negative impact on Diet deliberations in the following week. The ministry extended Tamogami's mandatory retirement until Nov. 30. But because he did not submit his letter of resignation, the ministry considered disciplinary action. The ministry seems to have tried to bring the matter to a close in a hurry because the procedures could drag on and also because the major opposition Democratic Party of Japan was set to grill the government at the Diet. An SDF officer's mandatory retirement age differs depending on post and rank. The ASDF chief of staff is required to retire at the age of 62. With his dismissal as ASDF chief of staff, Tamogami became a lieutenant general, whose mandatory retirement age is 60. At the point of the dismissal, Tamogami was already 60, along with 14 other lieutenant generals. A person reaching mandatory retirement is entitled to receive tens of million of yen in retirement allowance. A senior SDF officer criticized Tamogami, saying: "He should have tendered his resignation. What he did is not appropriate for a person who served in the top post." 8) Tamogami offers no apology or reflection YOMIURI (Page 4) (Full) November 4, 2008 Former ASDF Chief of Staff Toshio Tamogami held a press conference in Tokyo last night. In the session, Tamogami indicated that he would not retract his argument, insisting: "(What I wrote in my essay) was not wrong," and, "Japan was not an aggressor." Clad in a suit instead of the uniform he has worn for the last 37 years, Tamogami started off the press conference by reading out something titled "My view on my retirement." He did not offer an apology or reflection for throwing the Defense Ministry and the Self-Defense Forces into turbulence. The former ASDF chief repeated his argument that the perception that Japan was a bad country must be corrected. He said: "Japan has been under the spell of it being an aggressor nation under the postwar education system, and that has resulted in the loss of national TOKYO 00003065 007 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 confidence and the morale of the SDF personnel." Tamogami also said with a serious expression to incumbent SDF personnel: "They should take action by prioritizing the state and the people over their own matters at all times." Asked about the fact that his essay contradicts the government's view, Tamogami said in a strong tone: "If one is not allowed to rebut the government's view, that is same as North Korea." Tamogami also indicated that he would accept his 3 million yen prize money. The major opposition Democratic Party is set to demand Tamogami's Diet testimony. The former ASDF chief indicated that he would respond to such a call of the DPJ. The press conference ended in a little over 20 minutes. 9) Another blow to Aso government ahead of trilateral summit MAINICHI (Page 2) (Abridged) November 1, 2008 The government has sacked Air Self-Defense Force Chief of Staff Tamogami over his controversial essay. Prime Minister Aso and his administration, now being driven to deal with the global financial crisis's impact on Japan and the nation's ailing economy, will likely get into a scrape. It will not only affect Diet deliberations on a bill amending the new Antiterrorism Special Measures Law for the Maritime Self-Defense Force's extended refueling mission in the Indian Ocean but will also call the Aso administration's historical perception into question. Japan, China, and South Korea are scheduled to hold a summit meeting of their leaders in December, and Aso will host the trilateral summit. But the event this time can be taken as pouring cold water on him. 10) DPJ abduction panel proposes additional sanctions on North Korea, including independently designating the North as terror-sponsor and imposing embargo SANKEI (Page 3) (Excerpts) November 4, 2008 The Democratic Party of Japan's abduction issue taskforce, chaired by former Justice Minister Hiroshi Nakai, unveiled on November 2 a draft of additional sanctions on North Korea, produced in response to a lack of progress on the abduction, nuclear and ballistic missile issues. The sanctions include severe steps against North Korea, such as Japan independently designating the North as a state sponsor of terrorism, a ban on re-entry into Japan by North Korean residents, a total ban on exports and cash transfers to the North, and a freeze on assets held by North Korea-related organizations in Japan. The DPJ is expected to formally adopt the additional sanctions at its abduction taskforce officers meeting on Nov. 5. The draft sanction measures were compiled by taskforce secretary general Shu Watanabe and his deputy Jin Matsubara at the instruction of Nakai. The set of sanction measures consists of 14 articles in four areas: people, goods, money, and others. Most of them can be implemented under existing legislation. What makes this set of proposals unique is that it is designed to allow Japan to independently designate North Korea as a terror-sponsor. In response to Pyongyang's clear intent to ignore Japan following the U.S. delisting of the North as a state sponsor of terrorism, the additional sanctions are designed to demonstrate Japan's severe stance. The measures also include a step to expand the scope of the TOKYO 00003065 008 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 ban on re-entry into Japan that is limited to North Koreans in Japan with a status of North Korean authorities. Currently, financial sanctions are imposed only in cases connected with missile and weapons of mass destruction programs. The additional sanctions are designed to implement: (1) a total ban on money transfers to North Korea and DPRK-connected bank accounts and financial institutions; (2) a ban on transactions between financial institutions in Japan and North Korea and DPRK-related organizations; and (3) a freeze on assets held by North Korea and DPRK-connected organizations in Japan. The aim is to isolate North Korea financially by banning transactions between foreign financial institutions doing business with North Korea and Japanese financial institutions. 11) Prime Minister Aso has tightly packed diplomatic schedule NIKKEI (Page 2) (Full) November 1, 2008 Prime Minister Taro Aso will focus on holding summits with the top leaders of other countries, since he has decided to delay a dissolution of the House of Representatives for a snap election. He has a tightly packed diplomatic schedule, including the trilateral summit of Japan, China and South Korea. He is also enthusiastic about cooperating with other countries in dealing with the global financial crisis. However, a rocky path lies ahead for internal politics due to the divided Diet. Whether Aso will be able to score big gains through his diplomacy is uncertain. On Oct. 24 in Beijing where he was visiting to attend the summit of the Asia-Europe Meeting (ASEM),Aso said in an interview with a local TV station: "Friendship is a means, but the purpose is to produce mutual benefits and build a reciprocal relationship. We must not confuse the means with the end." His view is that the bilateral relationship will be stabilized by actual benefits rather than by friendship. "Chinese leaders have welcomed" Aso's position, according to a source connected with Japan-China foreign policy. In the summit of the top leaders of Japan and China on Oct. 24, Chinese President Hu Jintao broached a specific issue that the Japanese side had not expected, saying: "I would like to hear the prime minister's view on the international financial crisis." The summit of the Group of Twenty (G-20) on the global financial crisis, which will take place in Washington on Nov. 15, will be the climax of Aso's diplomatic schedule. In his meetings with top Asian leaders, the financial crisis will inevitably be a major issue, as well. A senor Foreign Ministry official predicted: "Compared with Europe and the United States, the damage to Asian countries is smaller. However, we will need to come up with measures in the future." Aso intends to put forward actual results rather than the abstract goal of "strengthening friendship" in his meetings with top Asian leaders. A government official said: "The prime minister may advocate the idea of improving the framework of emergency coordination on monetary policy." 12) Japanese government makes contact with persons close to Obama TOKYO 00003065 009 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 MAINICHI (Page 3) (Full) November 3, 2008 Taking the stand that Japan and the U.S. have a mature relationship, the Japanese government views that regardless of whether Republican Sen. McCain or Democratic Sen. Obama becomes the president of the U.S., there will be no major changes in U.S. policy toward Japan, according to a senior Foreign Ministry official. However, there are slight differences between the two candidates when it comes to Asia diplomacy. McCain takes a clear stand of giving priority to U.S. allies. This is similar to PM Aso's position of working with countries that share the same values as those of Japan in terms of democracy and the market economy. Obama, who has on his team of advisors such Japan experts as the Defense Department Japan Desk chief during the Clinton administration, characterizes the Japan-U.S. alliance as the base of his Asia diplomacy. However, he at the same time advocates the building of a security system also involving China. Regarding North Korea diplomacy, he has come up with a strong stance of attaching importance to dialogue. In this regard, there is a clear difference between Obama and PM Aso, who is leaning toward strengthening pressure on North Korea over the abduction issue. One government source said, "We can easily imagine Mr. McCain walking shoulder to shoulder with the prime minister. However, since the specific policy Mr. Obama will come up with is unclear, we cannot envisage what relationship he will build with the prime minister." The Japanese government has started making contact with U.S. presidential candidates' advisors from around January this year during the Fukuda administration. As Obama became a strong candidate, the Foreign Ministry invited Obama's advisors to a seminar in Washington in October. Senior officials exchanged views with them in an effort to create a personal network. Aides to the prime minister are also considering holding a meeting with the president-elect. Chief Cabinet Secretary Takeo Kawamura told a press conference on October 27, "Whether it is possible to hold such a meeting in terms of the political schedule is an issue we must bear in mind." He thus indicated the government's intention to look into the possibility of the prime minister meeting with the president-elect in Washington at the financial summit on November ¶15. 13) Financial summit: Prime minister to sound out concerned countries about holding second round in Japan as early as before year's end TOKYO SHIMBUN (Top Play) (Full) November 4, 2008 The emergency summit (financial summit) is to be held in Washington on the 15 in order to deal with the global financial crisis. The government on November 3 decided to sound out concerned countries about the idea of holding the second round in Japan as early as before year's end. The decision is in response to Prime Minister Aso's strong wishes. The government indents to enter into TOKYO 00003065 010 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 coordination of a specific schedule and specifics of topics, by dispatching special envoys to related countries as early as next week. Participants during the Washington summit will examine progress in efforts to tackle the financial crisis. The will aim to reach an agreement on reform principles that are needed for the prevention of a recurrence of the crisis and future prosperity. They will map out specific measures, based on those principles after the second round on. Mid- to long-term challenges, such as the way the International Monetary Fund (IMF) should be, will also likely be on the agenda. In the wake of the financial crisis, Prime Minister Aso on October 10 told reporters that he is ready to host the financial summit in Japan. He also conveyed this intention to U.S. President Bush during a telephone conversation with him. However, the president announced in a join statement with President Sarkozy of France, the EU presidency holder, after their talks, that the first meeting would be held in the U.S. The joint statement noted that the financial summit would be held several times. As such, Japan as the chair of the Group of Eight major nations summit meeting, has decided to hold the second round in Japan. However, the outlook is that even if Japan is to hold the financial summit, it will be in mid- or late December at the earliest after the ASEAN-plus-3 (Japan, China and South Korea) meeting to be held in Thailand on December 16-17, or early next year. 14) Consumption tax to be raised to about 10 PERCENT by around the mid-2010s, says State Minister for Economic and Fiscal Policy Yosano MAINICHI (Page 2) (Full) November 3, 2008 In connection with Prime Minister Aso's statement on a hike in the sales tax in three years' time, State Minister for Economic and Fiscal Policy Hajime Yosano during an NHK TV talk show on November 2 said, "State finances will go bust unless the consumption tax is raised in stages to 10 PERCENT by around the mid-2010s." He thus indicated his perception that it is necessary to raise the consumption tax rate by more than 5 PERCENT in stages in order to stably finance the social security system, once economic conditions improve. Concerning the flat-sum benefit payment system, a policy included in the package of additional economic pump-priming measures, Yosano said, "The government will pay benefits to all households that are entitled to livelihood support." He thus once again stressed his stance of looking into the policy with the possibility of exempting high income earners from the list of those who are eligible for such benefits. However, since Yosano's plan will make paperwork complicated, New Komeito Secretary General Natsuo Yamaguchi took a cautious stance: "The government's goal is to implement that policy within the current fiscal year. There must not be a delay." 15) DPJ President Ozawa on Internet video site: "Lower House will be dissolved in fall or later" TOKYO 00003065 011 OF 011 SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//08 ASAHI (Page 2) (Excerpts) November 4, 2008 Appearing on an Internet video site yesterday, Democratic Party of Japan (DPJ) President Ichiro Ozawa pointed out that Prime Minister Taro Aso's biggest chance was to dissolve the House of Representatives at the outset of the extraordinary Diet session in late September. Ozawa then revealed his perception on a Lower House dissolution, saying: "Mr. Aso will have to accept calls from the people that he should listen to them. There is a possibility that a general election will be held in the fall or at the beginning of the next regular session early next year." He appeared on the Niko Niko video site, which is popular among young people. 16) LDP's Hidenao Kanagawa criticizes postponement of Lower House dissolution ASAHI (Page 2) (Full) November 4, 2008 In a speech delivered yesterday in Fukushima City, Hidenao Nakagawa, former secretary general of the ruling Liberal Democratic Party (LDP),criticized Prime Minister Taro Aso's decision to put off a dissolution of the House of Representatives. Nakagawa stated: "The Democratic Party of Japan (DPJ) may submit a no-confidence motion (against the prime minister) by putting up do-or-die resistance. In the worst-case scenario, the Aso administration might fall into the same trap as the Abe and Fukuda governments." Regarding a consumption tax hike in three years, which Aso announced, Nakagawa said: "Before making a roadmap for a tax increase, he should come up with a roadmap for the things he should do before increasing the consumption tax." SCHIEFFER