Abe is above 60% in the polls
Kondo Daisuke

-OpEd-

TOKYO — On Dec. 2, Japan's lawmakers voted for a bill that permits casinos. The aim of the legislation was to boost tourism and revitalize the economy.

Gambling has been strictly prohibited in Japan ever since Empress Jito in the Seventh Century banned playing games for money. Japanese envoys learned gambling from China. They were dispatched to Chang'an, capital of the prosperous Tang Dynasty (618 to 907 AD) to study institutions and culture. "This is the only bad habit that our envoys have learned from China," Empress Jito said at the time.

Until now, Japanese law made gambling a criminal offense. A gambler could have been punished with a 500,000 yen ($4,200) fine. Repeat offenders faced three-year jail sentences. The only exceptions were betting on horse, boat, and motorcycle races. Popular "pachinko machines' found in video game arcades were also allowed but they were strictly regulated.

So how did the gambling bill pass the Japanese parliament? Casino owners may have Japanese Prime Minister Shinzo Abe to thank.

"Abenomics, which started with such a high-profile in 2013, has now come to a dead end. On the other hand, as many as five million Chinese people visited Japan between January and September this year. This has given Mr. Abe's government the idea to set up casinos everywhere in Japan to attract even more Chinese tourists," says a lawmaker close to Japanese Prime Minister Shinzo Abe.

"Hopefully the year 2020, when Japan holds the Tokyo Olympic Games, will be a new beginning for Japan's economic revival," says the lawmaker.

On Nov. 30, Japan's lower house of parliament started to review the casino bill. It took just six hours for the parliament's cabinet committee to discuss the legislation. By Dec. 6, the bill had already passed on to the senate.

"Ever since Mr. Abe met (American President-elect Donald) Trump on Nov. 17 at the Trump Tower, he has become another person since returning home. His view is that since casino king Mr. Trump is going to be president, Japan should set up casinos to build new Japan-US relations," says the same anonymous lawmaker.

The speed with which the legislation passed left little time for Japan's opposition parties to come up with objections.

Abe is one of the six longest-serving prime ministers since Japan's parliament was established in 1889. A Nov. 26 poll by Japan's Kyodo News Agency showed that the Abe government enjoys wide support. Before rise to power, the country had been through a rotating series of governments. "Every New Year, we change not just the Zodiac sign but also the prime minister's face," is an old Japanese joke.

Yet, even after more than four years in office, the Abe administration's popularity remains high, currently still hovering above 60% approval rating.

Key to Abe's power

How is Abe able to sustain such power and public support? He took over from a Democratic Party government that was ridiculed as a "kindergarten cabinet." In other words, no matter what Abe's policies are, the Japanese public tolerate them because they believe he can never be worse than the previous government.

Putin and Abe on Dec. 15 — Photo: Kremlin

In September, Renho Murata, a Taiwanese-Japanese politician, was elected leader of the Democratic Party. Since then the party has struggled even more. Meanwhile, instability caused by Brexit, the election of Trump, and, most recently, the risk of impeachment of South Korean president Park Guen-hye has prompted the Japanese public to hold on to a stable government.

Abe's cunning as a politician was able to avert the rise of other leaders such as Fumio Kishida and Yoshihide Suga who could have potentially taken his place. He appointed Kishida as foreign minister to keep him occupied. He promoted Toshihiro Nikai, the man most hated by Yoshihide, to be the party secretary-general to contain Yoshihide's ambitions.

Meanwhile, Abe continues to stand tall on the world stage. Last month, he had high-profile meetings with both Russian President Vladimir Putin and U.S. President Barack Obama. Looking ahead to 2017, Japan's leader looks like a safe bet to consolidate his power both at home and abroad.

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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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