(tentative translation)

"A Japan-Europe Partnership to Surmount Global Challenges"
Policy Speech by H.E. Mr. Taro Aso, Prime Minister of Japan

On the Occasion of His Visit to Europe
The Humboldt University of Berlin, Germany
May 5, 2009

Japanese

President Keitel of the Federation of German Industries,
Prof. Dr. Nagel, Acting President of the Humboldt University of Berlin,
Dr. Bosse, Secretary-General of the Japanese-German Center Berlin,
Distinguished Members of the German Bundestag,
Ladies and gentlemen,

One hundred and fifty years ago, a number of young scholars who would become the future leaders of Japan studied here at The Humboldt University of Berlin. This was the era in which Japan started on its path to modernization.

Located in Berlin, at the heart of central Europe, this venerable university has been a witness to the changes in the times -- war and peace, then Europe's division and integration. And, it was exactly twenty years ago that the Wall tumbled.

The world, which has been globalizing since the end of the Cold War, now faces critical challenges, including the financial and economic crisis said to occur once in a century. It is an honor to have been given the opportunity to address you here, a place that has watched intently what has come to follow each rough wave of history, and I wish to express my appreciation to all people concerned on the German side.

Ladies and gentlemen,

I feel that the world is now facing at least four major challenges. The first of these is the financial and economic crisis; the second, climate change; the third, the fight against terrorism; and the fourth, nuclear disarmament and non-proliferation of weapons of mass destruction. Ask a Japanese or a European, and the answer will most surely be the same, that these are the most important issues we face.

This is hardly coincidence. People in Japan at the Eurasian continent's easternmost edge and in Europe in the continent's west are exposed to the same global waves. Japan and Europe have both the capabilities and the sense of responsibility to take on global issues. Partnership between us is absolutely critical in surmounting these "rough waves." Today, I would like to touch on efforts by Japan and Europe to confront challenges and also paint a picture of the expansion of this partnership towards the future.

The Financial and Economic Crisis

The first challenge is that of the current financial and economic crisis.

Three main response measures were agreed upon at the G20 Summits on Financial Markets and the World Economy held in Washington and London. We agreed first, as measures to address the financial markets, to provide liquidity to maintain the integrity of the banking system, conduct capital injections into financial institutions, and dispose of non-performing loans; second, to stimulate the economy by mobilizing large-scale fiscal outlays; and third, based on the experience after the Great Depression of 1929, to oppose protectionism.

After the financial crisis of the 1990's, Japan experienced a situation in which no one in the market was borrowing capital despite a nominal interest rate of zero. Companies did not increase their investment, as their first priority was not investment but rather minimizing their debt. As a result, there was no effective "prescription" for economic recovery other than the government raising capital through debt and engaging in large-scale fiscal mobilization.

Putting this lesson to use, Japan has, with the sustainability of government finances in mind, undertaken fiscal stimuli totaling approximately 120 billion US dollars thus far in response to this crisis. In addition, we are now poised to undertake approximately 150 billion dollars in new fiscal outlays. These new measures alone are equivalent to 3% of Japan's GDP. At the same time, Europe has also been putting the European Economic Recovery Plan into motion. Japan and Europe must continue to maintain their close communication and to engage in appropriate policy management at the macro level.

Moreover, globally there is a need for assistance to economies that are more vulnerable among developing countries and middle-sized and small countries. At the G20 Summit in Washington this past November, I announced that Japan would lend a maximum of 100 billion US dollars to the International Monetary Fund (IMF) and urged other countries to make similar contributions. In response to this, the EU announced a loan of 100 billion dollars immediately prior to the London Summit. The efforts of Japan and Europe have set a course for the reinforcement of the financial foundations of the IMF.

The "Arc of Freedom and Prosperity" and Europe

Two years ago as Minister of Foreign Affairs, I articulated a new concept within Japan's diplomatic policy. That was the concept of the "Arc of Freedom and Prosperity," by which Japan would support the efforts of the countries of Eurasia aspiring to the fundamental values of a market economy, freedom, and democracy. This stems from my strong conviction that the pursuit of economic prosperity and democracy will lead to peace and happiness. Based on this concept, Japan has been engaged in cooperation and assistance to countries undertaking reforms.

For example, with the "GUAM" states, namely Georgia, Ukraine, Azerbaijan and Moldova, Japan is providing support to raise social and economic levels by promoting investment, tourism, and trade. The "Visegrad Four" nations of the Czech Republic, Slovakia, Poland, and Hungary are now working to play a role as donor nations. Japan, as a donor nation for many years, will share its knowledge with these countries. And, because they are making such efforts in these severe economic times, I would like to strengthen our cooperation and support.

Climate Change

Next I would like to touch on climate change as the second challenge.

The weak point of the Kyoto Protocol is that it covers a mere 30% of the world's total greenhouse gas emissions. Ensuring that all major emitters participate in the post-2012 framework is a major goal that Japan and Europe share. Even amidst the current economic crisis, we must not ease up in our efforts to combat climate change. In the last year the world experienced strains in energy supply and demand and was also visited by an economic crisis. The lesson we learned is that we must strike a balance among the three aspects of responses to environmental considerations, economic growth, and energy security.

I believe that the new framework must be sufficiently ambitious in contributing to the resolution of the climate change issue while at the same achieve a balance with economic growth and energy security. Moreover, it must be one with equitable targets set in accordance with individual countries' responsibilities and capabilities. Would you not agree that, rather than allow this to lapse into a "beauty contest" in which we vie with each other over the extent of our ambitions, Japan and Europe should instead lead the earnest discussions among countries to seek out the point at which the equitability of various targets come together, striking a balance with the heights of our ambitions?

I do not believe that consideration of the environment is a drag on economic growth, if appropriate policies are established. Amidst a severe economic climate, the pursuit of a sound environment becomes in fact a good opportunity for new growth. The key to this is technological innovation. Japan is prepared to use its technology and its inventiveness to lead the "low-carbon revolution," which will transform people's way of living. Using Japanese environmental technology and other means, Japan will under the "Cool Earth Partnership" provide support for developing countries aiming to achieve both emissions reductions and economic growth. Together, shall we not spread to the world growth which has the environment as one of its main pillars and support the transition to a low-carbon society?

The Fight against Terrorism

The third challenge we face is the fight against terrorism.

Japan and Europe are both devoting much attention to the historically challenging issues of the reconstruction and stability of Afghanistan. I would like to express my sincere respect to Germany and the other countries of Europe that are continuing to dispatch troops even as some have made the ultimate sacrifice. Thus far, Japan has constructed or restored more than 500 schools, trained 10 thousand teachers, provided literacy education to some 300 thousand people, and provided vaccines for a total of 40 million people.

In addition, with a view to the elections scheduled for August, in the area of security, Japan is providing support for salaries of the entire 80,000 Afghan police personnel for six months.

Afghanistan, now facing an election, is at a crucial moment. The political path forward for Afghanistan's rebirth was decided at the Bonn conference in 2001. A few months later, Japan hosted a donors' conference in Tokyo, and it was there that the framework for international economic assistance for Afghanistan was established.
This Japan-Europe partnership is still alive today in the field. NATO's Provincial Reconstruction Teams, or "PRTs," are actively supporting reconstruction and the improvement of security in various parts of Afghanistan, and Japan is engaged in cooperation with the PRTs led by Germany and other European countries. From this month, young Japanese diplomats will be participating in the Lithuania-led PRT. In the Indian Ocean, Japan's Maritime Self-Defense Force has been conducting replenishment support by providing fuel and water in support of the maritime interdiction activities to deter terrorism being undertaken by ships of Germany, France, the UK, and other European countries.

The issue of Afghanistan cannot be considered separately from that of the stability of the broader region, including Pakistan and Central Asia. Cooperation with Iran is also important. Foreign Minister Hirofumi Nakasone visited Iran three days ago and held discussions on efforts towards the stability of Afghanistan.

Japan also invited President Zardari of Pakistan to visit on April 17 and convened an international conference in Tokyo for the assistance to Pakistan. President Zardari expressed his strong determination towards combating terrorism and reforming the economy, and countries all around the world agreed to support this. Japan announced assistance of one billion US dollars and the European Commission, 600 million dollars. This set the stage for total pledges globally of over five billion dollars in assistance.

I would like to share with you a vision for the future of this region. Would it not be important in the future to develop a "North-South Logistics Route" from Central Asia through Afghanistan and Pakistan, leading to the Arabian Sea? Linking this region with the rest of the world through the sea will be the foundation for mutual prosperity. Japan is already providing assistance towards the construction of roads and rail lines as one portion of this. Japan would like to engage together with Europe in this endeavor as well.

Nuclear Disarmament and Non-proliferation

The fourth challenge is nuclear disarmament and non-proliferation of weapons of mass destruction and other weapons. One month ago in Prague, US President Obama strongly indicated the direction forward in realizing a world without nuclear weapons. The leaders of the United States and Russia are working to achieve a new nuclear arms control agreement by the end of this year. Within Europe as well, the UK and France have been advancing their efforts to reduce their nuclear capabilities with transparency.

Every year for the past 15 years at the United Nations, Japan, as the only country to have ever suffered the devastation of atomic bombings, has proposed a resolution for the total elimination of nuclear weapons, always adopted with overwhelming support. Right now, there exists unprecedented momentum towards nuclear disarmament.

Regrettably, the security environment in the Northeast Asia surrounding Japan is, we may well say, increasing in its severity. North Korea has demonstrated complete disregard for the calls from the international community and is proceeding with nuclear and missile development. In addition, it shows no indication that it will work towards the resolution of the abduction issue. North Korea has abducted innocent Japanese citizens, including a 13-year-old girl, yet even now does not allow their return.

China's defense spending has increased by a double-digit rate year-on-year for the last 20 years consecutively, yet the content is lacking in transparency. In addition, China has been proceeding with the modernization of its nuclear arms.

It is exactly because we are in this situation that it is important to move forward with nuclear disarmament and strengthen the non-proliferation regime. Europe was also threatened by the fear of nuclear warfare for many years. We shall take steps towards our goal of "a world without nuclear weapons," while maintaining the stability of the entire world. I would like to take advantage of this open and historic opportunity close at hand, together with Europe.

New Global Governance

For the world to surmount the difficult challenges it faces, it will be necessary to orchestrate the power of Japan, Europe, and indeed the international community. I would like to touch on the means by which this would occur.

There is now a shift occurring in the structure of international society, including the rapidly developing emerging economies. Two years ago, Germany launched the Heiligendamm Process to foster dialogue between the G8 and emerging economies. This has provided an important opportunity to enhance a sense of shared responsibility with the emerging economies.

This has also given rise to frameworks that deepen partnerships with a broader range of countries than the five countries of China, India, Brazil, Mexico, and South Africa that participate in the Heiligendamm Process. As for climate change, there is the Major Economies Forum (MEF), whose members are responsible for approximately 80% of global greenhouse gas emissions. And, the G20 Summits have been addressing the current financial and economic crisis, with meetings in Washington in November and in London last month. Its member countries account for approximately 80% of world GDP.

The various issues facing the world cannot be dealt with by the G8 alone. Japan looks forward to working together with countries, which have the will and the capability to fulfill responsibilities and prove this through the new frameworks that I just mentioned. Japan believes important that, working in such manner, we look for better ways with regard to governance of the international community in this new era.

At the same time, Japan believes that the importance of the G8 has increased. The G8 shares common values such as democracy and market economies. It has also made contributions towards the resolution of a multitude of global issues in a responsible manner. Good examples of this include issues related to development and Africa. With the G8 at the core, dialogues and international coordination with emerging economies and others should be strengthened. I consider this approach to be a concrete and viable means of orchestrating the power of the changing international society. Japan, together with other countries including those of Europe, will take up consideration of concrete means for making this possible.

Reforms that reflect the changes in international society must be carried out at the United Nations Security Council as well. Japan has made major contributions to the activities of the United Nations, including serving as a non-permanent member of the Security Council ten times. Upon the reform of the Security Council, Japan is determined to contribute continually to issues of world peace and security as a permanent member. Japan will move forward with efforts towards the reform of the Security Council together with Germany, which like Japan experienced reconstruction after World War II and has now come to occupy an important position in international society. Japan looks forward to continuing to receive the cooperation of the countries of Europe towards the implementation of early reform of the Security Council.

Japan-Europe Cooperation

Ladies and gentlemen,

The world is now facing unprecedented severe challenges. Thus we stand at a historical crossroads. Moreover, these challenges may confront us suddenly at times, as with the recent pandemic influenza originating in Mexico.

Predicting the future is a Herculean task. For example, in 1979 as the Soviet Union invaded Afghanistan, who among us predicted that the Berlin Wall would fall a scant ten years hence. It is impossible for anyone to predict what will be in 10 or 20 years' time. This is one of the lessons that the twentieth century bestowed on humankind.

Yet, however difficult the challenges buffeting us may be, I firmly believe that the international community, in particular Japan and Europe, acting cohesively can make any "wall" of challenges crumble. This is because Japan and Europe have an affinity that is quite substantial.

While Japan and Europe are geographically distant, being located on opposite sides of the Eurasian continent, we have a long history of overcoming various difficulties. And, more than anything else, we are aiming at the same ultimate goals. These are the creation of, first, a free society that allows individual capabilities to bloom and in which effort is rewarded; second, a society that respects rich diversity grounded in history and culture; third, a society that strikes a balance between competition and regulation and allows individuals to live in peace of mind.

As I mentioned earlier, the bonds between Japan and Europe through dialogues and cooperation now run deeper than ever, and that is true in responding to various challenges as well.

History indicates that partnership between Japan and Europe is inevitable. Japan will walk together with Europe towards the same ultimate goals. I would like to close my address today by stating my determination in this regard.

Thank you very much for listening.


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