News / Asia

Japan's Big Spending 'Abenomics' Sparks Interest From Ailing Europe

Japan's Big Spending 'Abenomics' Sparks Interest From Ailing Europei
X
June 22, 2013 2:41 AM
Not many politicians can claim to have had economic theories named after them - but the Japanese prime minister is now one. Shinzo Abe's program of big spending and loose fiscal policy has been dubbed 'Abenomics' - and with Japan recently showing what looks like strong growth, there have been calls for ailing European economies to adopt a similar strategy. Henry Ridgwell reports from London.
Japan's Big Spending 'Abenomics' Sparks Interest From Ailing Europe
Henry Ridgwell
Not many politicians can claim to have had economic theories named after them, but the Japanese Prime Minister is now one. Shinzo Abe's program of big spending and loose fiscal policy has been dubbed 'Abenomics' - and with Japan recently showing economic growth, there have been calls for ailing European economies to adopt a similar strategy.

Laughing with his fellow leaders at the final photo opportunity in Lough Erne, Japanese Prime Minister Shinzo Abe appeared highly satisfied with the outcome of this week's G8 summit in Northern Ireland.  He spoke at a press conference Tuesday.

Abe said that in the global economic discussion as well as in the bilateral talks, a strong interest was shown in the Japanese fiscal and growth strategies.

Analysts say much of that interest has come from Europe - which is suffering from low or negative growth, much like Japan had for the last two decades.  

"The short term relief that these programs can bring is, of course, something that is very welcome, would be very welcome in large parts of the euro area," Tobias Blattner, European Economist at the Japanese firm Daiwa Capital Markets.

Shinzo Abe describes Abenomics as having three 'arrows': monetary policies, or keeping down the value of the yen currency; huge fiscal stimulus - essentially printing more money; and encouraging growth through deregulation and policies like getting more women into the workforce.
 
So far it appears to be having an effect.

The yen has tumbled by over 20 percent against the dollar since last year.  That helped Japanese exports soar at the fastest annual rate in May since 2010 - up 10 percent from the previous year.  In the first quarter of 2013, Japan's economy grew by an annualized rate of 4.1 percent.

So should Europe's ailing economies take a leaf out of the book of Abenomics?  Takuji Okubo, Chief Economist at Japan Macro Advisors urges caution.

"When you look into the contents of the growth, you do see that half of the growth is coming from public demand such as public works, government consumption and that is still concerning, and that says that Japan's economy is still not self-sustaining," Okubo said.

When French President Francois Hollande visited Tokyo earlier this month, some French and Japanese media suggested he was going there for a lesson in 'Abenomics.'  France's economy meanwhile fell back into recession last quarter.  Hollande had this response.

"We have very different situations.  France is in the eurozone, and together with our partners, working together. Japan has the sovereign right to decide on its monetary policy and conditions alone," he said.

Blattner says President Hollande is being realistic. "Implementing the kind of Abenomic policies would not even be possible in the current framework.  It would only be possible at an aggregate level and, of course, there we have the skepticism of the core member states, the northern European economies like Germany, the Netherlands," he said.
 
So while Shinzo Abe appears to be speeding Japan's economic recovery - it seems Abenomics might not be one of the country's many exports.

You May Like

Kurdish Party Pushes Political Gamble to Run in Turkey Poll

HDP announces it will run as political party instead of fielding independent candidates in June election, but faces tough 10 percent threshold More

Twitter Targets Islamic State

New research shows suspending Twitter accounts of Islamic State, its supporters has been effective; group, its backers are facing 'significant pressure,' says terrorism expert More

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

Majur Juac made the leap from being a refugee in Africa to a master chess champion in US, where he shares his expertise with students More

This forum has been closed.
Comment Sorting
Comments
     
by: Kitagawa keikoh from: Daikanyama, JPN
June 22, 2013 7:54 PM
Japan had experienced the WW II and atomic bombs, and after that we have been working very hard to become one of the world top economic countries.
That's why we are recovering from the economic crisis, not because such meaningless politic strategy as Abenomics.

In Response

by: Yoshi from: Sapporo
June 23, 2013 10:41 PM
I think EU couniries need not pay attention to Abenomics because it seems merely a tempolary economic recovery.
Actually yen is again getting weak to dollar and stock plices are also getting down recently only a few months after the first action of monetary loosing. Those who have enjoyed weak yen and high stock prices are limited in big exporting companies and stock players.

Economic investment of firms is not yet prompted because domestic demands are not increased as expected. Workers wages and employment rate are not improved in general. A raise of consumption tax is planned next spring.

In Response

by: Samurai from: Japan
June 23, 2013 8:15 AM
I don't think Abenomix is meaningless. Mr. Abe is now following the way USA took several years ago, i.e., a departure from deflation. Japan has been in the straits of deflation for more than two decades. The only way to depart from the deflation is to cause Japan's economy to inflate (in this case, "reflation").

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Monitors Earth’s Vital Signs From Spacei
X
Rosanne Skirble
January 27, 2015 5:05 PM
The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.
Video

Video Weekly Protests in Korea Keep Japanese WWII Atrocities Alive

Every week in Seoul protesters gather in front of the Japanese Embassy to demand an apology and reparations from Tokyo for the thousands of South Korean women who were forced into prostitution during World War II. Although this year marks the 70th anniversary of the end of the war, these protestors have helped keep the issue of comfort women alive and made it difficult for Japan to move beyond its past wartime atrocities. VOA's Brian Padden reports from Seoul.
Video

Video Exercise: New Prescription for Parkinsons Disease

Exercise could be the new prescription for Parkinson's Disease, a progressive disorder of the nervous system that affects movement. More than six million people worldwide suffer from Parkinsons and they're traditionally treated with medication and surgery. Shelley Schlender has more.
Video

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Greece’s youngest-ever prime minister, 40-year-old Alexis Tsipras, was sworn in Monday after his victorious far-left Syriza party entered a coalition with far right rivals. Tsipras says he will restore dignity to Greece by ending spending cuts. So begins a new chapter for the country at the epicenter of Europe’s economic crisis - a change that has sent tremors across the continent, as Henry Ridgwell reports from London.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Oil Price Drop Troubles Texas Producers

As oil prices have fallen over the past several months, drilling operations have slowed in some parts of the United States - including Texas, the state that surpasses all others in energy production. The Lone Star State’s energy output has been boosted in recent years by development of resources trapped deep below ground in the Eagle Ford shale deposit, which stretches across south central Texas. As VOA’s Greg Flakus reports from Karnes City, Texas, the drop in oil prices has created concerns,
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid