Press Conference by The Prime Minister Ryutaro Hashimoto

12 January 1996
(Unofficial Translation)

Moderator: We would like to start the press conference.

Q: What are your top priority policy items? It is the first Liberal Democratic Party Government in two and a half years, and the people of the country, I believe, are expecting substantive economic policies, and I would like to ask for your views on those points.

Prime Minister Ryutaro Hashimoto: Yesterday, I assumed the position of Prime Minister and honestly, whenever someone calls "Prime Minister," I look around and I really can't feel as Prime Minister. There certainly may be various problems and questions on which my knowledge is insufficient, and I hope you will forgive me if I have to look at my papers. I look at this year as the first year of Structural Reform. In the postwar years, Japan has built up numerous systems and institutions, and changes are being called for with regard to these institutions, be it in politics, administration, the economy or society. In each of these areas, there is a need for fundamental structural reform. That being the case, this Cabinet will be working as a team, and this Cabinet will have as its basic character being a Cabinet of Reform and Creation, and to that I will give my utmost, and will appreciate your kind cooperation as well. As for the immediate economic situation a question was asked, in fact, about economic policy. On the basis of the new Triumvirate Policy Agreement, we would like to do our best with regard to domestic and foreign policy, and would like to ensure the earliest possible recovery of the economy and build a strong Japanese economy. More specifically, for the FY1996 budget, and also tax reform bills, we would like to see these legislative proposals passed as quickly as possible, so that, on 1 April we shall be able to implement a new current policy without any pause. Another point there is this non-performing asset problems of the Japanese national institutions, including the jusen issue, and we would like to resolve these problems as early as possible, and also try our best to rebuild confidence in the Japanese financial system. We would also like to revise and implement deregulation programs in a manner that can win trust so that reform of Japan will be implemented steadily in a way that will be trusted by the people. In the FY1996 budget, there is investment for research and development that will nurture industries which will support the future of Japan, and it also covers investment in technological development in new areas. We hope that out of these investments, new leading industry will emerge as early as possible. That is the direction in which our Cabinet will be doing our utmost.

Q: Regarding the disposition of the jusen problem, and regarding the introduction of public funds it is very unpopular, and I would like to know if you intend to further review this issue. Another point is: you had been Finance Minister in the past regarding the funding problem, including the administrative affairs what would you think?

Prime Minister Ryutaro Hashimoto: We will have to look back into the material in order to discuss about this matter. The financial system, first and foremost, is the very base of economic activities, and the non-performing debt and bad loans of the financial institutions will have to be solved as early as possible, and we regard this as the most immediate issue for the Japanese economy. Speaking of that aspect, the jusen problem, as well as the involvement issue of the financial institutions problem that is faced now, requires immediate solution. The stability of the Japanese financial system, and to recover the trust of other countries, and at the same time to contribute to the protection of depositors taking all these into consideration, we will have to get the Japanese economy back on its right track, and for that purpose we will have to ask the parties concerned to take all possible burdens, and at the same time, we feel it is inevitable that we will have to introduce public funds. In the new Triumvirate Policy Agreement, it is stated that an early solution should be sought for the financial problem, and we share the same view. But at the same time, as is being pointed out right now of course, I well understand this is far from winning the understanding of the Japanese public at the moment, and solving this particular issue requires the administration, the jusen themselves, and the financial institutions to clarify their responsibilities, and this is the effort that we will have to make. Towards that end, all the parties concerned will have to clarify what was the real situation and what had been the background, and on the part of the Government, we will have to do our best to explain what was the background history and what is the direction we seek for, and at the same time, in the deliberations in Parliament, there needs to be discussion from various angles. I believe this will be done, and thereby, we would like to clarify all the responsibilities of the parties concerned. I have been asked the same question in the past, but as former Finance Minister when this issue broke out, I also regard it as my own responsibility to explain what had happened in those days.

Q: Let me ask a separate question. In the upcoming Ordinary Session of the Diet, the major issue would be the question of the relationship between religion and politics. What is your view on that relationship?

Prime Minister Ryutaro Hashimoto: If you want to ask that question, let me explain a little more on the jusen issue. On this land-related financing, even before I became Finance Minister, if I look back into history numerous notifications and various hearings guidance was being provided in order to remove speculative land financing. Of course, it goes without saying that this was part of my policy as well. In October 1989 and also in January 1990, vis-a-vis non-banks, a request was made to exercise self-restraint with regard to speculative investment, and also in response to rising land prices, various measures were being put in place. There seems to be wide-spread misunderstanding speaking from the position of the Finance Ministry at that time, through the notification of the Director-General of the Banking Bureau, total volume control was put in place, and non-banks were requested to provide information with regard to their financing in real estate and construction industries, and at that time the Director-General of the Banking Bureau and the Ministry of Agriculture, Fisheries and Forestry also provided similar guidance to the co-op related financial institutions. The purport is very clear in those notifications. But the notification given to the non-banks and the notification given by the Director-General of the Banking Bureau are significantly different. With regard to financing for real estate, construction and non-banks, the Director-General of the Banking Bureau's request asked for a report. Vis-a-vis agricultural co-ops, there is a request for self-restraint on overall volume of financing, but there was no request for a report to be submitted with regard to financing in non-banks. When we asked the Ministry of Agriculture, the response was that they had already done that, and therefore, that point was not explicitly made in their guidance. In the investment volume control, jusen was not specified, and on this point various people have made comments. To request control on volume of financing in specific sectors is something that is extremely tough, a guidance that verges on illegality perhaps. If financial institutions, including Nourin Chukin and the shinren, or credit cooperatives I believe these last institutions were all included and I believe this is a matter where there will be a lot of debate in the days ahead.

Q: My other question - I believe that in the upcoming Ordinary Session of the Diet, the relationship between religion and politics will become a major issue, and I wanted to know your view on that. Also, your view on the question of reviewing Article XX of the Constitution.

Prime Minister Ryutaro Hashimoto: The separation of religion and politics was established as a rule because politics wanted to win independence from the church in Europe. In the history of Japan, before the end of the Second World War, there was the Japanese history of the State and the involvement of Shinto, and the separation of religion and politics was understood in that context, and I believe that is how the current concept of separation of religion and politics has been nurtured. In the history of Japan, Shinto as State religion gained power, and religious leaders involved faced various problems. I am sure many people have experienced hardships and many lost their lives, as we learned later. What is at issue today is how we look at religious organizations. In fact, debate is going on not just in the Diet, but also among the people, and there is a need to further deepen this debate. Now, Article XX of the Constitution guarantees religious freedom, and also various policies are being provided for on the basis of Article XX. To substantiate this religious freedom, the central or local Governments will not intervene in the various religions, as they exercise their administrative power. Of course, this Article itself does not exclude the right of religious organizations to engage in political activity. That has been our traditional view. But through the recent Diet debate, and also through the mass media, we have heard various views of the Japanese people, and since there has been debate in the Diet, I would very much like to study in detail various views on this matter, including Constitutional views and academics' views.

Q: A question on Okinawa - between the Prime Minister of Japan and the Governor of Okinawa there has been the lawsuit being filed regarding the signing of the lease by the Prime Minister representing the Governor. There is going to be Diet deliberation on this matter in the near future, and I would like to know your view in this regard.

Prime Minister Ryutaro Hashimoto: Let me just change the order of my answer. Until today, and thinking of the future it is the same, the most important bilateral relationship for Japan is the Japan-U.S. relationship, and the stability of the Japan-U.S. bilateral relationship takes as its foundation the maintaining of the Japan-U.S. Security Arrangements. This is vital, and it needs no mention. Just last year, when I was in the midst of negotiations on automobiles with the United States, among the members of the Asia-Pacific region, or the members of the European Union, including those who had supported the Japanese view, there had been a very loud cry for Japan to maintain the Japan-U.S. relationship and not to impair that relationship. Many people have confirmed my view about this issue. Thus, the stability of the Japan-U.S. bilateral relationship is something required by all the people around the world. So, I keenly felt how all the people around the globe had regarded this bilateral relationship, and the base for that is the Japan-U.S. Security Arrangements, and this also plays a very important role for the very peace and stability of the Asia-Pacific region. But last year, as you all know very well, there had been a very tragic incident which had occurred I don't know how to express it but with this as a trigger between Japan and the United States, and also regarding the Security Arrangements themselves, Japanese people had started to debate about this issue. When we contemplate about this matter, since Okinawa came back to Japan, and up to this date, how much we had paid attention to the citizens of Okinawa, how much we understood about their plight, or their sorrow, or their anger, and how much we tried to share their sorrow and pain when we question this matter today, I feel that we all should feel embarrassed. I have been a long-time member of the Social and Labor Issue Committee, or the Welfare Committee today, looking back at the problem of the grieved families of Shinabara, or those who had been hurt during the war before reaching the age of six and the consolation to them, or the issue of those children who have parents of different nationalities and what would happen to the child welfare allowance to be paid when the child's and their mother's nationality were different we all faced all these real issues, and every time we felt embarrassed. We had paid our tribute to the Okinawan people, apologized to them, but I think basically, we have somewhat neglected this matter of Okinawa. This morning, when President Clinton called me, I stressed the importance of the Japan-U.S. bilateral relationship and the importance of the Japan-U.S. Security Arrangements, which is the very foundation of that relationship. I told him that I was very aware of this, but at the same time, in order to win more cooperation and understanding from the Japanese people, I told President Clinton that the plight of the Okinawan people their sorrow - should be well understood. The way that we will be able to straightforwardly persuade the Okinawan people reducing the size of the U.S. military bases in Okinawa should be sought for. With all these feelings in mind, I have talked with President Clinton. I have discussed about other matters with President Clinton too, but, we at least, by the time President Clinton visits Japan in the month of April this year, will have to create an environment where we will be able to welcome President Clinton wholeheartedly and to enable us to successfully confirm the importance of our bilateral Security Arrangements and to be able to come up with a Joint Statement focussing on the importance of the Security Arrangements. In order to very positively move ahead with the issue of Okinawa, I have discussed with President Clinton to make this kind of environment become a reality. Of course, I couldn't go into great detail as I've just explained right now, but basically I feel that what I have said right now could be agreed upon with the United States. Because of that, the court case regarding Okinawa I have no time to receive a detailed report about the present status, so I do not know the details of the present situation. Nevertheless, I wish that this problem be solved as early as possible, taking due consideration of the feeling of the Okinawan people, and that the judicial institution will be able to come up with a solution that would be able to satisfy all the people concerned.

Q: You said you couldn't get into details, but did you discuss the U.S. base issue with President Clinton?

Prime Minister Ryutaro Hashimoto: Yes, we touched on that. But I did not reveal every single feeling and every single thought that I had on this issue during the phone conversation.

Q: On the consumption tax - in April of next year the tax rate will be increased, and there will be a review of the consumption tax later this year. I wonder what your views are on the consumption tax

Prime Minister Ryutaro Hashimoto: There are items for consideration with regard to the consumption tax. September of this year will be the deadline for reviewing the consumption tax, and starting April next year the consumption tax will be increased to 5% it has already been legislated. The purpose of providing those items for consideration, in view of the very serious fiscal situation, we believe that we cannot avoid very serious consultations. What I would also like to say at this time, is that it is not easy to ask the Japanese people to take on an additional burden we have to seek out the views of a broad range of people, people in all sectors and strata, and we believe that we have to come to a conclusion after spending sufficient time deliberating on this matter.

Q: It is expected that, under your Cabinet, there will be confrontation with the Shinshinto, and the opposition parties are seeking early dissolution of the Diet. What is your view?

Prime Minister Ryutaro Hashimoto: In the upcoming Diet session, I believe both sides should engage in a debate, and through that debate, we have to seek where our views and those of the opposition parties happen to be the same and different on the major issues of the day, and I think these efforts are being made by both sides. In doing so, since the time Prime Minister Murayama expressed his decision to resign, we, the three parties of the Coalition, reviewed our Policy Agreement from a fresh vantage point and drafted this new Triumvirate Policy Agreement. So, by making efforts to gain the understanding of the people on this policy platform, we also would like to ask the people, through these discussions, to hear our views on various matters. But I do hope that the largest opposition party, Shinshinto, and others, will cooperate with us in the Diet, so that there will be no pauses in the measures needed to stimulate the economy, so that the budget bill will pass before the end of the fiscal year, and so that we will be able to move on from 31 March to 1 April, the new fiscal year, without any pause, without any gap. In the meantime, there will be numerous diplomatic schedules, like the Nuclear Safety Summit in April, and we would like to do our utmost for the moment to ensure that the Japanese economy will get back on the growth track.

Q: No talks about dissolution and snap election?

Prime Minister Ryutaro Hashimoto: You love that subject matter, don't you? when I was Minister of International Trade and Industry, and I suggested this rather tongue in cheek. But I believe that what is most important for now is to ensure that no more Japanese manufacturers will escape from this country. We must make sure that the economy will get back on track, and therefore, I wanted to put the economy on a stable ground as early as possible. So, I believe that now, we have to see these efforts to recover the economy as our top priority, and we will do our utmost to that end. At the same time, there is this upcoming visit by President Clinton to Japan, and the Okinawa issue has come up from time to time as part of that agenda, and we have to make efforts on that issue as well. I don't think this is time to discuss snap elections. At least, that is my own feeling. I would like to open it up to questions from other members of the press.

Q: You have touched upon the Okinawa issue former Prime Minister Murayama had a prolonged discussion with Governor Ota twice. Do you have a plan to see Governor Ota in the near future?

Prime Minister Ryutaro Hashimoto: I personally wish to meet with Governor Ota and other officials of the Okinawa Government, and would like to hear what is going on myself. At the same time, making promises of what we can do as a nation, and along with that, we will try to win as much understanding from the Okinawan Government as possible. I haven't had enough time to discuss about this matter with the Chief Cabinet Secretary or Deputy Chief Cabinet Secretary. I would like to discuss this matter later with these two gentlemen. But, I personally wish to meet with them and listen to them sufficiently. That is my feeling.

Q: Regarding the very presence of the coalition ruling party in your book, regarding the possible pursuit of a Government run by a single party, you have also written that a coalition ruling government is not really an ideal form of government, but regarding the relationship with the other two parties in the future, and regarding the possible future political restructuring, what kind of view do you have?

Prime Minister Ryutaro Hashimoto: Ultimately, that is an issue on which the Japanese people, through voting, make the final decision. But, the political parties, individually coming up with a vision, trying to win the understanding of the people about the ideal of a specific party, and backed by that kind of people, try to aim for a single-party-run government, is, I think, the basic desire on the part of all political parties. But speaking about the present coalition framework of Sakigake, the Social Democratic Party of Japan and the Liberal Democratic Party, first of all there was this policy agreement between the three parties, and that is being announced to all the parties in the debate in the Diet, and the policy makers who have agreed on this Triumvirate Policy Agreement, I myself being one of the parties I have given a green light about this program, and we felt that Prime Minister Murayama was the most appropriate person as a leader. Based on that Policy Agreement, the Murayama Administration was formed. Thus, when Prime Minister Murayama announced that he was going to resign, the three coalition parties have started all over again from a blank slate and have for many days made all efforts to find out whether we would again be able to arrive at a coalition agreement. When all these policy agreements had been formed by the three leaders of the parties, we discussed who is going to be the joint Coalition candidate, and it was my honor, but by Mr. Murayama and Mr. Takemura, I was being nominated as the candidate. So, speaking about the future too, if there is not going to be a political party which is going to win the majority, coalition government is something that is always possible, and in such a situation, the Government should not be emerging from the viewpoint of non-LDP or anti-LDP, but the coalition party founded on the policy agreements could be a political situation that could occur in the future. This Coalition Government was formed under that very procedure, and among the three parties of the Coalition, in the past one and a half years, we have jointly supported the Murayama Administration, and in that process, mutual understanding had been deepened, and a mutual trust relationship had been established so that such cooperation could be conducted very effectively. In the days ahead, we will have to face the election run on a single-seat election system, and if the House of Representatives is dissolved, all political debates will be conducted among the candidates, and we will ask the Japanese people to decide about their candidates. So, I would not be able to make any prediction, but in the future too, I should say that political parties will take their policy as their pillar, and new parties will emerge based on that, and will mature based on that kind of basic policy. Unless there is going to be a situation where a party of majority vote will emerge, the next task would be the formation of a coalition government, which would be formed among the parties that could agree on basic policies. But in this single seat proportionate election system, if the election is run on this mechanism I from the initial stage had been somewhat dubious about this election system I doubt whether the Japanese people should be divided into two sides regarding all political issues. Or how could we really have those people who represent the minority opinion be members of the Government? This is something to which I look forward with some expectation but at the same time with some anxiety.

Q: A huge amount of public funds will be used for the resolution of the jusen issue. Of course, there is strong resentment among the people on that point. What is more unclear was that, towards the end of last year, a list of policy was presented to the people, and the process has remained very unclear. There is a suggestion that further public funds might have to be mobilized for future losses, and there is no conclusion on that point. How would you address these issues?

Prime Minister Ryutaro Hashimoto: I am sorry to say that I was responsible for the Ministry of International Trade and Industry, and therefore, I have not been aware of the detailed processes in other words, I am not sure how this decision or conclusion to mobilize public funds was reached in the process of discussions between the Ministry of Finance and the Ministry of Agriculture, Forestry and Fisheries. So, I hope you will forgive me to that extent for lack of knowledge. But I have been watching the process from the side, and I believe, that amongst the people of the Ministry of Finance and the Ministry of Agriculture, Forestry and Fisheries, I am sure there was discussion to the very limit on how much burden could be taken on. Now, I am not sure at what point the decision was made to mobilize public funds, but when that conclusion came out, we said that there is need for disclosure information, and also we suggested that there is a need to organize a task force within the Deposit Insurance Corporation, comprising members of the prosecutor's office, the police, as well as the public and the judiciary, and I am sure you remember those suggestions. Of course, these are matters in the hands of the private sector. But, problems were emerging that could not leave the issue simply in the hands of the private sector. Do we leave the matter to discussions within the private sector? Are there other alternatives? Debate was made on all these points, and I believe at the very end, a policy decision was made, just at the very brink. Now, there is the question of what happens from here. The problem is that disclosure has been insufficient, as pointed out by many people. So, we will continue to seek more disclosure, we will ask for cooperation of all those concerned, including the working-level people, to that end, and should there remain problems, then we will ask the judiciary, the police, and the National Tax Agency people to play their parts. Should there be illegal aspects, the matters should be disposed of appropriately. But there are also areas where no illegal issues arise, but in those areas we will seek a greater disclosure. With regard to secondary losses, certainly we believe that those concerned ought to make as much effort as possible.

A: Can you promise that there will be disclosure?

Prime Minister Ryutaro Hashimoto: I would like to see disclosure; I can say to that extent.

Q: But you cannot give an undertaking?

Prime Minister Ryutaro Hashimoto: Before saying whether I will promise or not, we have not discussed this matter in our new Cabinet. Having said that, I will do my best, and I will ask those concerned to do their best, so that there will be full disclosure. That is something that I will ask the members of my Cabinet in the next Cabinet meeting. I believe there are numerous examples. For example, I was criticized very severely by the public at the time of the securities scandals, and I was asked to disclose the list of those who received compensations for investment losses. At the end of the day, the Government asked those concerned to disclose the list of those compensated with their own responsibility. Of course, at that time there was some argument that the list should be disclosed to the extent that the National Tax Agency was aware of, but there was no guarantee that that would be 100% full, and we asked the securities firms to disclose the list to the extent that they were aware of and they could. That is the disclosure of information at that time. Of course, there will be difference in disclosure from time to time. There might be disclosure on the financial state of the borrowers, there could be a disclosure on the status of the management of jusen. There could be cases of financing where, at the time the financing was made, the case was viewed as worthwhile, with substantive collateral, although later on the situation deteriorated. So, if I am asked, can I promise there will be disclosure, all I can say is that I will ask my Cabinet members to do their best, but I cannot at this point and at this very place say that there will be a full disclosure. To the extent I am made aware of, I believe there have been suggestions for disclosure from various angles. But each Minister, being responsible for each Ministry, should to the extent possible do his or her utmost so that there will be as full as possible a disclosure of jusen-related issues to the people.

Q: You should each should do his or her best what about the lenders' responsibility as far as jusen issues are concerned?

Prime Minister Ryutaro Hashimoto: As I said, I am not aware of all the details, but it is often said that there is the parent bank responsibility versus the lender's responsibility. Of course I believe the funding institution's responsibility is heavy, but there is also lender's responsibility. In March 1990, notification of control on volume restraint this guidance was given by the Director-General of the Banking Bureau to the financial institutions, and also to agriculture co-op related institutions as well, in the form of a joint request by the Director-General of the Economic Bureau of the Ministry of Agriculture, Forestry and Fisheries and the Director-General of the Banking Bureau of the Ministry of Finance. But there was no reporting obligation included in that joint request. It is not possible to say that one side is 100% clean and the other side is 100% responsible. That is not the approach that should be taken in resolving this problem.

Q:Will we go into debating restructuring of the Ministry of Finance, and reviewing their responsibilities and authorities, as well?

Prime Minister Ryutaro Hashimoto: I think it hinges on the question of how far disclosure will proceed, and if disclosure doesn't progress at all, the answer will be entirely different. If there is progress in disclosure, and also in that process, it is clarified in what manner Government ministries were responsible, and if it is also clarified that, should have been this sort of institution in place, then the problems could have been resolved. The matter should be viewed from various angles; we should not start out with any fixed view as to whether a specific institution should be retained or should be scrapped if facts emerge. How could those facts be revealed clearly to the public that is something we would like to know and without knowing that, we will not be able to fulfill our responsibility to the public. It is in this sort of process, that we should come to some sort of answer on that question.

Q: Seen from the policy side, there is often debate over large government versus small government. You yourself have been involved very much in social welfare, and you have also stated that politics should be in the interest of the weak. That might suggest a large government. But Shinshinto has been advocating the responsibility of the individual, which might suggest a smaller government. This may be a general perception, but Prime Minister Hashimoto, what is your view of the State? What is the fundamental difference of future visions between yourself and Shinshinto. In case there is further political realignment, what would be the issue over which there would be a political realignment?

Prime Minister Ryutaro Hashimoto: I am sorry to say that I have never used the expression "large government" myself. Since the second Ad-hoc Administrative Reform Commission, I have aimed at simple and efficient administrative organization. I have never discussed this matter from the vantage point of large or small government. It is true that I believe social security and welfare is necessary. Since you have asked the question, let me elaborate on why I believe this is necessary. It was in 1963, that I first was elected a Member of Parliament, and it was at that time that the Protection of the Elderly Law was passed, and the word "elderly" came into the public domain for the first time. On 1 September that year, those older than 100 years of age were only 153. On the Day of the Elderly Last year, I believe there were more than 6,000 centigenarians. In 1963, if I remember correctly, about 1.65 million people were born. I don't know about the number of children born last year, but the year before last, I believe about 1.23 million babies were born. So, while this has turned into a country of longevity, the number of newborn has declined drastically. In other words, industrial structure and economic structure will have to be revamped significantly, and from this demographic change alone, it is clear that we have to reform the system of the country. Otherwise, the reality is that the country will stop functioning. That is why I believe administrative reform is necessary, and Reform and Creation is necessary, because of demographic questions. So, I don't look at the question as one of large or small government. As Japan becomes, shall we say, a super-aging society, the number of young working people will shrink rapidly; yet, we have to be able to move on to the 21st century with sufficient dynamism and vitality. For that to happen, the industrial and economic structure has to change, because families around you are already beginning to change. It is in that situation that we have to see to it that the number of workers will not decline. Nowadays, unfortunately, young college graduates are facing a very tough time in order to win jobs. The fact is that the working population is declining, and business corporations must be aware that there should not be a gap in their work force. Therefore, I very much hope that they will consider this matter very seriously. But in the longer perspective, we have to make sure there will be a climate or environment where people can work comfortably. We also have to change the climate so that women will be able to take up more jobs. Now, you said I might be suggesting large government because I like social security and welfare. But can the Government, the State Administration, create a climate for changing families and a changing home. Japan is a long chain of islands from Okinawa to Hokkaido; the climate is different from north to south. Also, industrial structure is different from north to south. If people are to work without any anxiety, we first have to make sure that women will be able to work. But again, the situation naturally will be different from region to region, from family to family. Also, to nurture families in which children can grow up without anxiety, again, this is not a matter for State policy. It is up to the Government to see how they can support the local community, and the administrative structure that is closest to the local community, to the family, is the local government, and the responsibility of the central government is to see how they could raise funds to support the local governments. I advocate decentralization because the local governments should be more responsible towards the local community. Beyond that, can the Government do something? In the super-aging society, there will be more and more areas in which the central government cannot really do anything, and in each region, there will be an increasing number of problems that ought to be resolved, and there will be an increasing number of problems that cannot be addressed by the Government. The central Government should certainly consider what they can do in order to support the efforts of the local governments and the local communities. Of course, to that extent, I believe social welfare efforts to that end should be necessary, but I am not thinking in terms of large government. I, rather, would seek simple and efficient Government. Now, I have no intention to criticize the views of others.

Q: Speaking about the continuity of the Government, I would like to ask my question. Last August, former Prime Minister Murayama had clearly apologized for the Second World War days, etc., but what do you think of the Statement that had been announced?

Prime Minister Ryutaro Hashimoto: I had seen that paper when it was a draft, and I was consulted. I was one of those people. He had used the word "end of the war," and I had suggested to him to be more clear and say "the day that Japan lost the war," and to that end, I felt that there was no difference between my feeling and the Statement that had been made public.

Q: Prime Minister Hashimoto, you formed the Cabinet yesterday, but what was the basic philosophy, or policy, on forming that new Cabinet?

Prime Minister Ryutaro Hashimoto: As I said, taking into consideration the problems we are faced with today, and including the importance of solving the problem of jusen, I have formed this Cabinet. What we seek during this Government is, in the short-run period of time, recovery of the Japanese economy, and also, to win back the trust of the public for the financial institutions, including jusen, so this is more of an economic issue. On the other hand, as I discussed when asked about big government or small government, the policy that could not be taken care of by the central Government, something that the local government would have to be asked to take care of all these projects that would be most effectively be taken care of by the local government the Japanese demography itself is going to change, the industrial system, the decentralization in order to realize all these objectives, it is very important that deregulation should be very positively sought for by the Japanese Government. The interim report of the deregulation effort is already being formulated by the ministries concerned; by the end of March, this report should be completed, adding all new programs and new conclusions, and we want the present Government to really implement all these efforts. In terms of external affairs, from Europe and the Asia-Pacific region, the stable bilateral relationship between Japan and the United States is called for; so taking that reality into consideration, and also paying due respect to the feeling of the Okinawan people, and understanding their plight and sorrow, the present Government intends to streamline and reduce the size of the U.S. military bases in Okinawa. But that should be conducted from the viewpoint of further deepening the bilateral relationship and steadfast maintenance of the Japan-U.S. Security Arrangements. So, this present Cabinet is going to pay attention to all aspects of the problems that we are faced with. So, keeping that in mind, I have chosen all the Cabinet members.

Q: Regarding this Cabinet nomination as the very core of the present Cabinet, Mr. Kajiyama has been designated as the Chief Cabinet Secretary. Speaking about this decision, when did you make your decision, and in addition to that, what was your thinking behind that? Also, what kind of wish and expectation do you have for Mr. Kajiyama in the days ahead?

Prime Minister Ryutaro Hashimoto: The time I had clearly made my decision to ask Mr. Kajiyama to be the Chief Cabinet Secretary was, when the Secretary-Generals of the three parties had been conducting various debate and deliberation; from the time I was given my free will to decide the Chief Cabinet Secretary, his name came to mind. The Secretary- Generals' discussion has continued for the last several days; there was a discussion about what would be the appropriation of the Cabinet members for various different parties, and various issues had been sorted out and solved. Was it the day before yesterday?

Chief Cabinet Secretary Seiroku Kajiyama: I believe so.

Prime Minister Ryutaro Hashimoto: I believe it was the day before yesterday. But I had very in-depth thinking and finally came to the decision that I wanted to ask Mr. Kajiyama to become the Chief Cabinet Secretary. That, in short, means I have chosen him because I felt Mr. Kajiyama has many traits and aspects which I do not have, and he is a senior in terms of life, and he has given me various important suggestions in the past, too. When one assumes a position like myself, there will be very few people who can really be frank to you. Of course, journalists, like you, are always straightforward. But, in general, you are going to lose people who are going to speak to you straightforwardly. I felt it is him who is going to speak very straightforwardly to me, and I wanted a person like that near myself. As I thought along this line, I felt that I should ask Mr. Kajiyama to become the Chief Cabinet Secretary. The idea came into my mind, and I expressed that feeling the day before yesterday.

Q: Regarding the handling of the issues remaining from the Second World War if you have any specific ideas, I would like know.

Prime Minister Ryutaro Hashimoto: What do you mean by solving the problems remaining from the Second World War?

Q: The compensations, the relationship with countries in Asia, the guarantee of the individuals of North Korean descent.

Prime Minister Ryutaro Hashimoto: I feel regarding that issue, when there had been a solution reached between the countries, I wish that the individual problems would not come to the surface too much. I am quite aware that there are many individuals who are asking for individual compensation, not only from Asia during the Second World War, in the various theaters of war in Asia, there are among those people who had become the hostages of the Japanese army, I understand that many people are asking for compensation on individual terms. Some of the problems already, I know, are put into court, so regarding this particular issue, I would like to refrain from answering this particular question today. Thank you very much, and I seek your cooperation in the future too.